Chip War

Chip War, despite its title, is only partly about the current US-China chip war. On one side is the US and its allies trying to prevent China from developing the capabilities to produce cutting edge chips. On the other side is China trying to achieve self-sufficiency in chip manufacturing. Chip War is really the story of the entire semiconductor industry from the invention of the transistor to a world where billions of people carry billions of transistors on them at all times. I charted the major events mentioned in the book in the timelines below. The titles are my own.

timeline
    title 1945-1965 (Birth of Silicon Valley)
    1945 : First computer ENIAC is built to compute artillery tables for the US Army.
    1948 : John Bardeen and Walter Brattain invent the transistor at Bell Labs.
    1950 : Electronics spies Joel Barr and Alfred Sarant flee America after giving the USSR over 9000 pages of documents.
    1955 : Willam Shockley founds Shockley Semiconductor in Palo Alto near aging mother.
    1957 : Traitorous 8 leave Shockley to found Fairchild Semiconductor.
    1958 : Texas Instruments hires MIT trained Morris Chang to improve transistor yields.
    1959 : Jack Kilby at Texas Instruments and Robert Noyce at Fairchild develop the first ICs.
    1961 : Fairchild opens transistor assembly plant in Hong Kong, the first semiconductor facility in East Asia.
    1963 : Zelenograd setup to be the Soviet Silicon Valley. : Apollo Guidance Computer is the first to be based on ICs provided by Fairchild.
    1964 : Texas Instruments starts development of the Paveway laser guided bomb.

timeline
    title 1965 - 1980 (Asia & Second Offset Strategy)
    1965 : Gordon Moore observes that the number of transistors on an IC doubles every 2 years. It will later be called Moore's Law.
    1968 : Gordon Moore and Robert Noyce leave Fairchild to found Intel. : Texas Instruments opens first plant in Japan after years of negotiations.
    1969 : Texas Instruments open first plant in Taipei, Taiwan.
    1970 : Intel introduces the 1103, the first commercial DRAM chip.
    1971 : Intel releases the 4004, the first commercial microprocessor.
    1973 : Perkin-Elmer debut the Microalign, the first projection aligner, which helps improve yields from 10% to over 50%.
    1976 : Japan starts the VLSI project to improve Japanese semiconductor manufacturing. It ends in 1980.
    1977 : Secretary of Defense Harold Brown looks to precision guided munitions (PGMs) to offset Soviet numerical advantage. : William Perry leaves electronics firm to become Undersecretary of Defense for Research and Engineering.
    1978 : DARPA begins Assult Breaker program to integrate technologies important for PGMs. : Idaho potato billionare funds newly foundded semiconductor fab Micron. : Mead and Conway launch a revolution in chip design with electronic design automation (EDA).
    1978 : GCA introduces the first stepper for photolithography.
    1979 : Andrew Grove becomes President of Intel. He will become CEO in 1987.

timeline
    title 1980-1990 (Rise of Japan)
    1980 : Nikon starts shipping the NSR-1010G, the first stepper made in Japan.
    1981 : KGB agent Vladimir Vetrov defects to France, revealing Directorate T's efforts to steal Western science and technology. : IBM releases the IBM PC with an x86 Intel processor which will be standard on all future PCs. : Bank of Japan lowers interest rates to 5.5% while US interest rates are at 16.4%.
    1982 : FBI arrests Hitachi engineers for industrial espionage. : Chief of the Soviet General Staff Nikolai Ogarkov admits to US journalist that Soviet technology is a generation or two behind. : Japan's global market share of memory chips surpasses the US's.
    1983 : Lee makes the "Tokyo declaration", declaring that Samsung will become a DRAM vendor.
    1984 : The Semiconductor Chip Production Act passes Congress to limit chip design copying. : ASM and Phillips found ASML as a joint venture.
    1985 : Japan makes 48% of global investment in semiconductors compared to <40% for the US. : Micron and Texas Instruments are the only remaining US companies memory business. : CIA study of Soviet microprocessors finds them half a decade behind the US's.
    1986 : Japan makes more chips than the US. According to Noyce, US chipmaking is in a "death spiral". : US-Japan Semiconductor Agreement limits Japanese chip exports.
    1987 : SEMATECH consortium is founded with DARPA funding to improve the US chip industry. : Morris Chang founds TSMC to fabricate chips designed by customers. : Ren Zhengfei, a former officer in the PLA, founds Huawei as an importer of PDX switches.
    1989 : US share of the lithography market falls to 21% while Japan's has risen to 70%. SEMATECH pours millions into GCA to revive the American lithography industry. : Intel's i486 is the first x86 microprocessor with more than 1 million transistors.

timeline
    title 1990-2005 (America Resurgent & Taiwan/South Korea Rising)
    1990 : Huawei begins producing its own PBX switches. : Advanced RISC Machines Ltd (ARM) is founded to further develop the Acorn RISC Machine Processor.
    1991 : US and coalition partners win Gulf War with heavy use of PGMs. :  Bell Lab scientists demonstrate the posibility of using 13.8 nm light (EUV) for lithography.
    1992 : Samsung introduces first commercial 16Mbit SDRAM chip, beating incumbent Hitachi. : The Soviet Union dissolves. The US has won the Cold War.
    1993 : GCA fails. : Jensen Huang and Chris Malachowsky found Nvidia as a fabless GPU maker. : The US overtakes Japan in chip sales.
    1995 : Micron shocks Japanese chipmakers by selling older DRAM for far less.
    1996 : Taiwan and South Korea lead in capital expendure spending as percentage of sales at 100% and 60%.
    1997 : Grove steps down as Intel CEO, having overseen a 4500% increase in market capitalization. : EUV LLC is founded as a public-private partnership to develop EUV lithography.
    1998 : Texas Instruments sells its memory business to Micron.
    2000 : Former Texas Instruments engineer Zhang Rujing founds Semiconductor Manufacturing International Corporation (SMIC) in China.
    2001 : ASML purchases Silicon Valley Group, leaving ASML the sole benefactor of EUV LLC.
    2004 : Sony Playstation Portable is the first commerical use of a 3D IC.

timeline
    title 2005-2015 (Mobile & AI)
    2006 : Apple switchs Macs, the last major PC not using x86, to x86 Intel processors. : Intel turns down Apple request to supply microprocessors for the iPhone. Apple turns to ARM.
    2007 : Apples releases the first generation iPhone. : Nvidia develops CUDA to allow programmers to use its GPUs for general purpose computing.
    2008 : AMD goes fabless and spins off semiconductor manufacturing business into Global Foundries.
    2009 : Morris Change returns as CEO of TSMC. He puts together a Grand Alliance of companies in the semiconductor industry centered on TSMC.
    2010 : The Apple A4 is the first system on a chip designed in-house.
    2011 : ASML delivers the TWINSCAN NXE3300, the first production EUV lithography machine.
    2012 : AlexNet, the winner of the 2012 ImageNet Large Scale Visual Recognition Challenge, uses Nvidia GPUs for training.
    2013 : State owned enterprise Tsinghua Unigroup begins acquisition spree of semiconductor companies.
    2014 : Global Foundries acquires IBM's semiconductor business. : Secretary of Defense Chuck Hagel announces third offset strategy in a speech. : Intel releases 14 nm Broadwell CPUs. Intel will be stuck at 14 nm for another 7 years.

timeline
    title 2015-2023 (Chip War)
    2015 : TSMC has >50% of the foundry market. Samsung has only 5% but is the largest chipmaker when including its own chips. : Xi Jinping announces the Made in Chinda 2025 plan which aims to boost domestic chip production by 70% over 10 years.
    2016 : Google introduces its own AI accelerator TPU. : AMD agrees to license x86 chip designs to China.
    2017 : Trump takes office. His foreign policy is much more aggressive against China.
    2018 : Global Foundries stops development of 7 nm fabrication process. The only foundaries working on 7 nm are TSMC and Samsung. : US DoJ indict Fujian Jinhua and UMC for conspiring to steal IP from Micron.
    2019 : US imposes export controls on Huawei for supplying goods, technology, and services to Iran.
    2020 : COVID pandemic shifts demand and supply, resulting in global chip shortages. : US Commerce Department extends export controls, blocking Huawei from buying semiconductors.
    2021 : Samsung announces 38 trillion KRW investment in Pyeongtaek to fabricate 5 nm logic chips. : TSMC begins construction of a fab in Arizona capable of producing 4nm chips. TSMC also approves $2.9 bilion in investment towards their Nanjing fab.
    2022 : PLA conducts amphibious assault drills across the Taiwan Strait.
    2023 : Dutch regulations prohibit exporting EUV lithography machines to China.

I knew some of the history that Miller talks about: the invention of the semiconductor at Bell Labs, the traitorous 8, Moore’s law, and the founding of Intel are Silicon Valley lore. But most of the events in the book were new to me. I didn’t know how early Silicon Valley companies offshored manufacturing to Asia, how Japan overtook the US as the global leader in chipmaking, or how America—with Taiwan and South Korea—retook the crown. I certainly knew nothing about the Soviet semiconductor industry; I assumed there wasn’t one. Another surprise was the centrality of semiconductors to economies and militaries by the 1980s. Then, as now, the US government made an effort to preserve the US chip industry against Japanese and Asian competition because it needed a secure supply of chips for its missiles, planes, and ships.

Another theme of the book is the global semiconductor supply chain. There are the foundries that manufacture chips, the fabless semiconductor companies that design chips, the lithography and materials companies that make the machines that make the chips, and the software companies that develop electron design automation (EDA) software. Yet, due to the ever greater capital required to shrink chips, the supply chain has consolidated into a few firms in a few countries. Taiwan and South Korea are home to the biggest fabs: TSMC and Samsun. The maker of the only EUV lithography machine, ASML, is Dutch. The best chip designers and chip design software developers are American: Nvidia, AMD, Qualcomm, Cadence, Synopsys, and Mentor Graphics. In fact, in this ecosystem, Intel—historically America’s leading chipmaker—is unusual for designing and fabricating its own chips.

These firms are bottlenecks in the chip supply chain and the objects of the US-China chip war. By limiting access to EDA software and lithography machines, China won’t be able to design and fabricate domestic chips. Then by imposing export restrictions, China won’t be able to buy the most advanced chips. Without the most advanced chips, China will be behind its rivals in technologies like AI, robotics, and big data. While these measures will hurt, I doubt China will be set so far behind. Already, China can make 7 nm chips. Chip War is full of examples of countries investing in their semiconductor industries, catching up, and exceeding incumbents. Why should China be so different?

The computer chip is the hardware that powers the world of software in which we spend our lives. Chip War is a great book that tells the twists and turns of how that chip became the world’s most crucial technology.