In 2020, the coronavirus pandemic brought the microchip industry to a standstill. Both the supply and demand sides were disrupted as factories shut down and requirements for laptops and computers shot up dramatically as people moved to work from home. The following year, a series of mishaps, including a fire at a Japanese microchip-manufacturing facility, worsened the shortage, and forced carmakers like Toyota and General Motors to stop operations for weeks. iPhones and gaming consoles such as PlayStation 5 were scarcely available, and tech companies lost billions of dollars. In his latest book, Chip War, economic historian Chris Miller writes: “Political leaders in the US, Europe and Japan hadn’t thought much about semiconductors in decades. Like the rest of us, they thought “tech” meant search engines or social media, not silicon wafers (microchips).” These tiny chips are today the bedrock of our modern world. From household appliances to mobile phones, cars to aeroplanes, toys to high-end luxury products, they are part of almost every essential product. Microchips, also known as semiconductors or integrated circuits, play an important role in military and defence technology. Satellites, communication systems, cruise missiles, all run on semiconductors, which are made from silicon and consist of millions or billions of transistors that act like miniature electrical switches that flip on and off to process data such as images, radio waves and sounds. How did these tiny chips come to dominate the world? How did the United States perfect its microchip technology? And most importantly, how did semiconductors become a geopolitical prize and a focal point? Miller answers these questions as he chronicles the history of microchips, with a focus on the key players who invented the new technology, and who ensured it was cheaply and readily available. There was the Nobel Prize-winning physicist William Shockley, who established Shockley Semiconductor in Mountain View, California, in 1955 with the ambition of building the world's most sophisticated transistors. And then there were his eight engineers who ultimately founded their own company, Fairchild Semiconductor. “The eight defectors from Shockley’s lab are widely credited with founding Silicon Valley,” writes Miller. Among them were Bob Noyce, inventor of the microchip and the founder, in partnership with another defector, Gordon E Moore, of Intel Corp in 1968. During the Cold War, the Soviet Union too, tried to set up its own version of Silicon Valley. They failed because they focused only on “vast espionage campaigns” to copy American microprocessors that ultimately produced substandard semiconductors, Miller writes. The region that did become a leading player in this industry was Asia — where companies in countries such as Japan, South Korea, Hong Kong, and Singapore threatened the dominance of the US. In response, the US chose to innovate around its competitors — “rather than cutting off from trade, Silicon Valley offshored even more production to Taiwan and South Korea to regain its competitive advantage”. This decision to move the manufacture of semiconductors outside the country has now come back to haunt the US. Today, Taiwan makes 37 per cent of the annual global supply of chips, thanks to the giant Taiwan Semiconductor Manufacturing Company (TSMC), while the US produces only 12 per cent. The strategic insecurity in this situation is underlined every time China threatens to “reunify” Taiwan with the mainland. "As China and the United States struggle for supremacy, both Washington and Beijing are fixated on controlling the future of computing — and, to a frightening degree, that future is dependent on a small island that Beijing considers a renegade province and America has committed to defend by force,” Miller writes. Chip War interweaves the past, present, and possible future of the semiconductor industry, spotlighting its evolution in response to changing geopolitical imperatives. Title | Chip War: The Fight for the World’s Most Critical Technology Author: Chris Miller Publisher: Simon & Schuster Pages: 464 Price: Rs 799
