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Chip War

Tags: #books #computers #political-science #technology #non-fiction

🚀 The Book in 3 Sentences

This book is about the history of semiconductor production. It goes through the pioneers, the innovators, and the giants of the industry. It also goes through the political factors that govern the semiconductor industry.

🎨 Impressions

It was quite an interesting read and gives a good overview and deep dive into the history of semiconductors and discusses how the business and political spectrum collide. It also delves into the innovators and pioneers in the industry, their backgrounds, and what made their companies successful. It also goes into the challenges presented by the companies and how small the margins of errors are.

I got more insight into how the companies that have seamless technology, such as Tesla and Apple, often have custom-designed chips. It also made me aware of how the industry works, the designers of chips, the manufacturers of chips and the suppliers of manufacturing tools.

✍️ My Top Quotes

  • China now spends more money each year importing chips than it spends on oil.

  • Armchair strategists theorize about China’s “Malacca Dilemma”—a reference to the main shipping channel between the Pacific and Indian Oceans—and the country’s ability to access supplies of oil and other commodities amid a crisis. Beijing, however, is more worried about a blockade measured in bytes rather than barrels

  • Today, no firm fabricates chips with more precision than the Taiwan Semiconductor Manufacturing Company, better known as TSMC.

  • Apple sold over 100 million iPhone 12s, each powered by an A processor chip with 11. billion tiny transistors carved into its silicon. In a matter of months, in other words, for just one of the dozen chips in an iPhone, TSMC’s Fab 18 fabricated well over 1 quintillion transistors—

  • In 1970, the second company Moore founded, Intel, unveiled a memory chip that could remember 1, pieces of information (“bits”). It cost around $, roughly two cents per bit. Today, $ can buy a thumb drive that can remember well over a billion bits.

  • Chips from Taiwan provide 37 percent of the world’s new computing power each year. Two Korean companies produce 44 percent of the world’s memory chips. The Dutch company ASML builds 100 percent of the world’s extreme ultraviolet lithography machines, without which cutting-edge chips are simply impossible to make. OPEC’s 40 percent share of world oil production looks unimpressive by comparison.

  • Japanese soldiers described World War II as a “typhoon of steel.”

  • The United States built more tanks than all the Axis powers combined, more ships, more planes, and twice the Axis production of artillery and machine guns.

  • The war was waged by soldiers at Stalingrad and sailors at Midway. But the fighting power was produced by America’s Kaiser shipyards and the assembly lines at River Rouge.

  • Outside of Tokyo, Akio Morita, the young engineer, donned his full uniform to hear Emperor Hirohito’s surrender address, though he listened to the speech alone rather than in the company of other naval officers, so he wouldn’t be pressured to commit ritual suicide.

  • About a year earlier, in Palo Alto, California, a group of eight engineers employed by William Shockley’s semiconductor lab had told their Nobel Prize−winning boss that they were quitting. Shockley had a knack for spotting talent, but he was an awful manager. He thrived on controversy and created a toxic atmosphere that alienated the bright young engineers he’d assembled. So these eight engineers left Shockley Semiconductor and decided to found their own company, Fairchild Semiconductor, with seed funding from an East Coast millionaire.

  • Most important was Bob Noyce, the leader of the “traitorous eight,” who had a charismatic, visionary enthusiasm for microelectronics and an intuitive sense of which technical advances were needed to make transistors tiny, cheap, and reliable. Matching

  • MIT considered the Apollo guidance computer one of its proudest accomplishments, but Bob Noyce knew that it was his chips that made the Apollo computer tick.

  • While looking through a microscope at one of their transistors, Lathrop and his assistant, chemist James Nall, had an idea: a microscope lens could take something small and make it look bigger. If they turned the microscope upside down, its lens would take something big and make it look smaller. Could they use a lens to take a big pattern and “print” it onto germanium, thereby making miniature mesas on their blocks of germanium? Kodak, the camera company, sold chemicals called photoresists, which reacted when exposed to light. Lathrop covered a block of germanium with one of Kodak’s photoresist chemicals that would disappear if exposed to light. Next, he turned his microscope upside down, covering the lens with a pattern so that light would only pass through a rectangle-shaped area. Light entered the pattern, shined in a rectangle shape through the lens, and was shrunk in size by the upside-down microscope as it focused onto the photoresist-coated germanium, with the rays of light creating a perfectly shaped, miniature version of the rectangular pattern. Where light struck the layer of photoresist, the chemical structure was altered, allowing it to be washed away, leaving a tiny rectangular hole, far smaller and more accurately shaped than any glob of wax could have been. Soon Lathrop discovered he could print “wires,” too, by adding an ultra-thin layer of aluminum to connect the germanium with an external power source. Lathrop called the process photolithography—printing with light.

  • A master bridge player, Chang approached manufacturing as methodically as he played his favorite card game. Upon arriving at TI, he began systematically tweaking the temperature and pressure at which different chemicals were combined, to determine which combinations worked best, applying his intuition to the data in a way that amazed and intimidated his colleagues. “You had to be careful when you worked with him,” remembered one colleague. “He sat there and puffed on his pipe and looked at you through the smoke.”

  • As one of Fairchild’s employees put it in the exit questionnaire he filled out when leaving the company: “I… WANT… TO… GET… RICH.”

  • After one class, Trutko asked the Nobel Prize winner to sign a copy of his magnum opus Electrons and Holes in Semiconductors. “To Anatole,” Shockley signed, before barking at the young scientist with complaints that the Soviet Union refused to pay royalties for the textbook’s Russian translation.

  • CIA report in 1959 found that America was only two to four years ahead of the Soviets in quality and quantity of transistors produced. At least several of the early Soviet exchange students were KGB agents—suspected at the time, but not confirmed until decades later—forging an intimate connection between student exchanges and Soviet defense industrial goals.

  • The recipe for chips was already extraordinarily complicated. Foreign exchange students studying with Shockley at Stanford could become smart physicists, but it was engineers like Andy Grove or Mary Anne Potter who knew at what temperature certain chemicals needed to be heated, or how long photoresists should be exposed to light. Every step of the process of making chips involved specialized knowledge that was rarely shared outside of a specific company.

  • Soviet leaders never comprehended how the “copy it” strategy condemned them to backwardness. The entire Soviet semiconductor sector functioned like a defense contractor—secretive, top-down, oriented toward military systems, fulfilling orders with little scope for creativity.

  • De Gaulle was formalistic and ceremonious, a tradition-minded military man who saw himself as the incarnation of French grandeur. Ikeda, by contrast, thought his country’s voters were straightforwardly materialistic, and promised to double their incomes within a decade.

  • Morita’s physics degree proved useful in postwar Japan, too. In April 1946, with the country still in ruins, Morita partnered with a former colleague named Masaru Ibuka to build an electronics business, which they soon named Sony, from the Latin sonus (sound) and the American nickname “sonny.” Their first device, an electric rice cooker, was a dud, but their tape recorder worked well and sold better.

  • Japan’s powerful Ministry of International Trade and Industry also wanted to support electronics firms, but the ministry’s impact was mixed, with bureaucrats at one point delaying Sony’s application to license the transistor from Bell Labs by several months on the grounds that it was “inexcusably outrageous” for the company to have signed a contract with a foreign firm without the ministry’s consent.

  • “Our plan is to lead the public with new products rather than ask them what kind of products they want,” Morita declared. “The public does not know what is possible, but we do.”

  • Sony’s expertise wasn’t in designing chips but devising consumer products and customizing the electronics they needed. Calculators were another consumer device transformed by Japanese firms. Pat Haggerty, the TI Chairman, had asked Jack Kilby to build a handheld, semiconductor-powered calculator in 1967. However, TI’s marketing department didn’t think there’d be a market for a cheap, handheld calculator, so the project stagnated.

  • “A people with their history won’t be content to make transistor radios,” President Richard Nixon later observed.

  • Sony’s Morita, who happened to be a friend of Haggerty, offered to help in exchange for a share of the profits. He told TI executives to visit Tokyo incognito, register at their hotel under false names, and never leave their hotel room. Morita visited the hotel clandestinely and proposed a joint venture: TI would produce chips in Japan, and Sony would manage the bureaucrats. “We will cover for you,” he told the Texas Instruments executives. The Texans thought Sony was a “rogue operation,” something they meant as a compliment.

  • Sporck had studied engineering at Cornell before being hired by GE in the mid-s at the firm’s factory in Hudson Falls, New York. He was tasked with improving GE’s process for manufacturing capacitors and proposed changing the factory’s assembly line process. He believed his new technique would improve productivity, but the labor union that controlled GE’s assembly line workers saw him as threatening their control over the production process. The union revolted, staging a rally against Sporck and burning him in effigy.

  • The two Fairchild employees who interviewed him were drunk after a boozy lunch and offered him a job on the spot. It was one of the best hiring decisions Fairchild made.

  • Hong Kong. The city’s 25-cent hourly wages were only a tenth of American wages but were among the highest in Asia. In the mid-s, Taiwanese workers made 19 cents an hour, Malaysians 15 cents, Singaporeans 11 cents, and South Koreans only a dime.

  • A postwar study found that only 9. percent of Sparrows fired in Vietnam hit their target, while 66 percent malfunctioned, and the rest simply missed.

  • Foreign policy strategists perceived ethnic Chinese communities all over the region as ripe for Communist penetration, ready to fall to Communist influence like a cascade of dominoes. Malaysia’s ethnic Chinese minority formed the backbone of that country’s Communist Party, for example. Singapore’s restive working class was majority ethnic Chinese

  • By the early 1980s, the electronics industry accounted for 7 percent of Singapore’s GNP and a quarter of its manufacturing jobs. Of electronics production, 60 percent was semiconductor devices, and much of the rest was goods that couldn’t work without

  • Noyce and Moore abandoned Fairchild as quickly as they’d left Shockley’s startup a decade earlier, and founded Intel, which stood for Integrated Electronics.

  • coupling a tiny transistor with a capacitor, a miniature storage device that is either charged () or not (). Capacitors leak over time, so Dennard envisioned repeatedly charging the capacitor via the transistor. The chip would be called a dynamic (due to the repeated charging) random access memory, or DRAM. These chips form the core of computer memory up to the present day.

  • Intel planned to dominate the business of DRAM chips. Memory chips don’t need to be specialized, so chips with the same design can be used in many different types of devices.

  • At his parents’ fiftieth wedding anniversary party in 1972, Bob Noyce interrupted the festivities, held up a silicon wafer, and declared to his family: “This is going to change the world.”

  • “In the past 200 years we have improved our ability to manufacture goods and move people by a factor of 100,” Mead calculated. “But in the last 20 years there has been an increase of 1,, to 10,, in the rate at which we process and retrieve information.” A revolutionary explosion of data processing was coming. “We have computer power coming out of our ears.”

  • “We are really the revolutionaries in the world today,” Gordon Moore declared in 1973, “not the kids with the long hair and beards who were wrecking the schools a few years ago.”

  • Exponential increases, which Moore’s Law dictated, are rarely seen and hard to comprehend.

  • They joked that Japan was the country of “click, click”—the sound made by cameras that Japanese engineers brought to chip conferences to better copy the ideas. The fact that major American chipmakers were embroiled in intellectual property lawsuits with Japanese rivals was interpreted as evidence that Silicon Valley was still well ahead.

  • Academics devised elaborate theories to explain how Japan’s huge conglomerates were better at manufacturing than America’s small startups. But the mundane reality was that GCA didn’t listen to its customers, while Nikon did. Chip firms that interacted with GCA found it “arrogant” and “not responsive.” No one said that about its Japanese rivals.

  • Greenberg himself aimed criticism at the company’s employees. “He would use unbelievable four-letter words,” one subordinate remembered. Another recalled a decision to ban high-heeled shoes, which Greenberg thought ruined the company’s carpets. As tension grew, the receptionist developed a code with fellow employees, turning on a ceiling light to denote that Greenberg was in the building, and turning it off when he left. Everyone could breathe a bit easier when he was out.

  • “Potato chips, computer chips, what’s the difference?” one Reagan Administration economist was widely quoted as saying. “They’re all chips.

  • Trade negotiators compared negotiating with the Japanese to peeling an onion. “The whole thing is a rather zen experience,” one U.S. trade negotiator reported, with discussions ending with philosophical questions like “what is an onion, anyway.”

  • Chipmakers needed better manufacturing equipment, while the firms that produced this equipment needed to know what chipmakers were looking for. CEOs of equipment firms complained that “companies like TI, Motorola, and IBM… just would not open up about their technology.” Without an understanding of what technology these companies were working on, it was impossible to sell to them. Chipmakers, meanwhile, grumbled about the reliability of the machines they depended on. In the late 1980s, Intel’s equipment was running only 30 percent of the time due to maintenance and repairs, one employee estimated.

  • “The United States has been busy creating lawyers,” Morita lectured, while Japan has “been busier creating engineers.”

  • “Serving the nation through business,” the first part of the Lee family motto read.

  • If HP could grow from a Palo Alto garage to a tech behemoth, surely a fish-and-vegetables shop like Samsung could, too.

  • Conway was a brilliant computer scientist, but anyone who spoke with her discovered a mind that glistened with insights from diverse fields, astronomy to anthropology to historical philosophy. She had arrived at Xerox in 1973 in “stealth mode,” she explained, following being fired from IBM in 1968 after undergoing a gender transition. She was shocked to find that the Valley’s chipmakers were more like artists than engineers. High-tech tools were paired with simple tweezers.

  • By the end of the 1980s, a chip with a million transistors—unthinkable in the early 1970s, when Lynn Conway had arrived in Silicon Valley—had become a reality, when Intel announced its 486 microprocessor, a small piece of silicon packed with 1. million microscopic switches.

  • In the early 1980s, the KGB reportedly employed around one thousand people to steal foreign technology. Around three hundred worked at foreign posts, with most of the rest on the eighth floor of the KGB’s imposing headquarters on Moscow’s Lubyanka Square, sitting atop the Stalin-era prison and torture chambers.

  • The Soviet consulate in San Francisco reportedly had a team of sixty agents targeting the tech firms of Silicon Valley. They stole chips directly and bought them from the black market, supplied by thieves like the man called “One Eyed Jack,” who was caught in California in 1982 and accused of stealing chips from an Intel facility by hiding them in his leather jacket.

  • The KGB thought its campaign of theft provided Soviet semiconductor producers with extraordinary secrets, but getting a copy of a new chip didn’t guarantee Soviet engineers could produce it. The KGB began stealing semiconductor manufacturing equipment, too. The CIA claimed that the USSR had acquired nearly every facet of the semiconductor manufacturing process, including nine hundred Western machines for preparing materials needed for semiconductor fabrication; eight hundred machines for lithography and etching; and three hundred machines each for doping, packaging, and testing chips. However, a factory needed a full suite of equipment, and when machines broke down, they needed spare parts. Sometimes spare parts for foreign machines could be produced in the USSR, but this introduced new inefficiencies and defects

  • Western spies were shocked at just how much the Soviets stole.

  • The French quickly shared information about Vetrov with U.S. and other allied intelligence services. The Reagan administration responded by launching Operation Exodus, which tightened customs checks on advanced technology. By 1985, the program had seized around $ million worth of goods and resulted in around one thousand arrests.

  • The USSR’s “copy it” strategy had actually benefitted the United States, guaranteeing the Soviets faced a continued technological lag. 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 half a decade behind.

  • One popular Soviet joke from the 1980s recounted a Kremlin official who declared proudly, “Comrade, we have built the world’s biggest microprocessor!”

  • The most pessimistic Soviet estimates suggested that if the U.S. launched a nuclear first strike in the 1980s, it could have disabled or destroyed 98 percent of Soviet ICBMs.

  • One issue was political meddling. In the late 1980s, Yuri Osokin was removed from his job at the Riga semiconductor plant. The KGB had demanded that he fire several of his employees, one of whom had mailed letters to a woman in Czechoslovakia, a second who refused to work as an informant for the KGB, and a third who was a Jew. When Osokin refused to punish these workers for their “crimes,” the KGB ousted him and tried to have his wife fired, too. It was hard enough to design chips in normal times. Doing so while battling the KGB was impossible.

  • A crucial ingredient in TSMC’s early success was deep ties with the U.S. chip industry. Most of its customers were U.S. chip designers, and many top employees had worked in Silicon Valley.

  • Were it not for Communist rule, China might have played a much larger role in the semiconductor industry. When the integrated circuit was invented, China had many of the ingredients that helped Japan, Taiwan, and South Korea attract American semiconductor investment, like a vast, low-cost workforce and a well-educated scientific elite. However, after seizing power in 1949, the Communists looked at foreign connections with suspicion. For someone like Morris Chang, returning to China after finishing his studies at Stanford would have meant certain poverty and possible imprisonment or death.

  • Chairman Mao’s “Brilliant Directive issued on July 21, 1968” insisted that “it is essential to shorten the length of schooling, revolutionize education, put proletarian politics in command…. Students should be selected from among workers and peasants with practical experience, and they should return to production after a few years study.” The idea of building advanced industries with poorly educated employees was absurd. Even more so was Mao’s effort to keep out foreign technology and ideas

  • Most of China’s scientists resented the chairman for ruining their research—and their lives—by sending them to live on peasant farms to study proletarian politics rather than semiconductor engineering.

  • But still, much of the Maoist legacy remained. The Americans were told that Chinese scientists didn’t publish their research because they opposed “self-glorification.”

  • The example of Shockley—a brilliant scientist but a failed businessman—demonstrated that the link between capitalism and self-glorification wasn’t as straightforward as Maoist doctrine suggested.

  • The company even had a slogan, “one old staffer brings along two new ones,” emphasizing the need for experienced foreign-trained employees to help local engineers learn.

  • In 1984, Philips, the Dutch electronics firm, had spun out its internal lithography division, creating ASML.

  • The only real competitor to Canon and Nikon was ASML, the small but growing Dutch lithography company. In 1984, Philips, the Dutch electronics firm, had spun out its internal lithography division, creating ASML.

    • In the years since Intel first adopted the x architecture, computer scientists at Berkeley had devised a newer, simpler chip architecture called RISC that offered more efficient calculations and thus lower power consumption. The x architecture was complex and bulky by comparison. In the 1990s, Andy Grove had seriously considered switching Intel’s main chips to a RISC architecture, but ultimately decided against it. RISC was more efficient, but the cost of change was high, and the threat to Intel’s de facto monopoly was too serious. The computer industry was designed around x and Intel dominated the ecosystem. So x defines most PC architectures to this day.*

  • In 1990, Apple and two partners established a joint venture called Arm, based in Cambridge, England. The aim was to design processor chips using a new instruction set architecture based on the simpler RISC principles that Intel had considered but rejected. As a startup, Arm faced no costs of shifting away from x, because it had no business and no customers. Instead, it wanted to replace x at the center of the computing ecosystem. Arm’s first CEO, Robin Saxby, had vast ambitions for the twelve-person startup. “We have got to be the global standard,” he told his colleagues. “That’s the only chance we’ve got.”

  • Otellini, Intel’s CEO from 2005 to 2013, admitted he turned down the contract to build iPhone chips because he worried about the financial implications. A fixation on profit margins seeped deep into the firm—its hiring decisions, its product road maps, and its R&D processes.

  • When he heard a quip from a journalist in the 1990s that “real men have fabs,” he adopted the phrase as his own. “Now hear me and hear me well,” Sanders declared at one industry conference. “Real men have fabs.”

  • In the 1990s, when Microsoft Office introduced an animated, paperclip called Clippy that sat at the side of the screen and dispensed advice, it represented a leap forward in graphics—and often caused computers to freeze.

  • Nvidia released CUDA, software that lets GPUs be programmed in a standard programming language, without any reference to graphics at all. Even as Nvidia was churning out top-notch graphics chips, Huang spent lavishly on this software effort, at least $ billion, according to a company estimate in 2017, to let any programmer—not just graphics experts—work with Nvidia’s chips.

  • For each generation of cell phone technology after 2G, Qualcomm contributed key ideas about how to transmit more data via the radio spectrum and sold specialized chips with the computing power capable of deciphering this cacophony of signals. The company’s patents are so fundamental it’s impossible to make a cell phone without them.

  • Chang realized that TSMC could pull ahead of rivals technologically because it was a neutral player around which other companies would design their products. He called this TSMC’s “Grand Alliance,” a partnership of dozens of companies that design chips, sell intellectual property, produce materials, or manufacture machinery. Many of these companies compete with each other, but since none fabricate wafers, none compete with TSMC. TSMC could therefore coordinate between them, setting standards that most other companies in the chip industry would agree to use.

  • This investment in specialized silicon explains why Apple’s products work so smoothly.

  • So the text etched onto the back of each iPhone—“Designed by Apple in California. Assembled in China”—is highly misleading. The iPhone’s most irreplaceable components are indeed designed in California and assembled in China. But they can only be made in Taiwan.

  • He then joined TSMC in the late 1990s just as deep-ultraviolet lithography tools, which produced light with a wavelength of 193 nanometers, were coming online. For nearly two decades, the industry relied on these tools to fabricate ever-smaller transistors, using a series of optical tricks like shooting light through water or through multiple masks to enable light waves measuring 193nm to pattern shapes a fraction of the size. These tricks kept Moore’s Law alive, as the chip industry shrank transistors from the 180nm node in the late 1990s through the early stages of 3D FinFET chips, which were ready for high-volume manufacturing by the mid-s.

  • “People worked so much harder in Taiwan,” Chiang explained. Because manufacturing tools account for much of the cost of an advanced fab, keeping the equipment operating is crucial for profitability. In the U.S., Chiang said, if something broke at 1 a.m., the engineer would fix it the next morning. At TSMC, they’d fix it by 2 a.m. “They do not complain,” he explained, and “their spouse does not complain” either.

  • “When a Chinese firm said, ‘Let’s open a joint venture,’ ” one European semiconductor executive explained. “I heard, ‘Let’s lose money.’ ” The joint ventures that did emerge were generally addicted to government subsidies and rarely produced meaningful new technology.

  • China spends more money buying chips each year than the entire global trade in aircraft. No product is more central to international trade than semiconductors.

  • Integrated circuits made up 15 percent of South Korea’s exports in 2017; 17 percent of Singapore’s; 19 percent of Malaysia’s; 21 percent of the Philippines’; and 36 percent of Taiwan’s.

  • Lee built Samsung from a trader of dried fish into a tech company churning out some of the world’s most advanced processor and memory chips by relying on three strategies. First, assiduously cultivate political relationships to garner favorable regulation and cheap capital. Second, identify products pioneered in the West and Japan and learn to build them at equivalent quality and lower cost. Third, globalize relentlessly, not only to seek new customers but also to learn by competing with the world’s best companies. Executing these strategies made Samsung one of the world’s biggest companies, achieving revenues equivalent to 10 percent of South Korea’s entire GDP.

  • America’s technological lead in fabrication, lithography, and other fields had dissipated because Washington convinced itself that companies should compete but that governments should simply provide a level playing field. A laissez-faire system works if every country agrees to it. Many governments, especially in Asia, were deeply involved in supporting their chip industries.

  • Then, after joining an advisory council convened by the White House, Krzanich later resigned from it. Even when industry executives overlooked Trump’s domestic policies, his volatility made him a problematic ally. Announcing tariffs via tweet was never a tactic that would impress CEOs.

  • The China hawks on the NSC were determined to change this dynamic. They saw the Micron case as the type of unfair trade that Trump had promised to fix, even though the president himself displayed no particular interest in Micron

  • “Weaponized interdependence,” one former senior official mused after the strike on Huawei. “It’s a beautiful thing.”

  • According to a Chinese media report that’s since been removed from the internet, HSMC was founded by a group of scam artists who carried fake business cards that read “TSMC—Vice President” and spread rumors that their relatives were top Communist Party officials. They duped the Wuhan local government into investing in their company, then used the funds to hire as CEO TSMC’s former head of R&D. With him on board, they acquired a deep-ultraviolet lithography machine from ASML, then used this feat to raise more funds from investors.

  • One of China’s core challenges today is that many chips use either the x architecture (for PCs and servers) or the Arm architecture (for mobile devices); x is dominated by two U.S. firms, Intel and AMD, while Arm, which licenses other companies to use its architecture, is based in the UK. However, there’s now a new instruction set architecture called RISC-V that is open-sourced, so it’s available to anyone without a fee. The idea of an open-source architecture appeals to many parts of the chip industry. Anyone who currently must pay Arm for a license would prefer a free alternative. Moreover, the risk of security defects may be lower, because the open nature of an open-source architecture like RISC-V means that more engineers will be able to verify details and identify errors. For the same reason, the pace of innovation may be faster, too.

  • According to the American Automotive Policy Council, an industry group, the world’s biggest auto companies can use over a thousand chips in each car.

  • These firms are estimated to have produced 7. million fewer cars in 2021 than would have been possible had they not faced chip shortages, which implies a $ billion collective revenue loss, according to industry estimates.

  • But the world produced more chips in 2021 than ever before—over 1. trillion semiconductor devices, according to research firm IC Insights. This was a 13 percent increase compared to 2020.

  • Some back-of-the-envelope calculations illustrate what’s at stake. Taiwan produces 11 percent of the world’s memory chips. More important, it fabricates 37 percent of the world’s logic chips. Computers, phones, data centers, and most other electronic devices simply can’t work without them, so if Taiwan’s fabs were knocked offline, we’d produce 37 percent less computing power during the following year.

  • Losing 37 percent of our production of computing power each year could well be more costly than the COVID pandemic and its economically disastrous lockdowns. It would take at least half a decade to rebuild the lost chipmaking capacity.

  • Meanwhile, Ukraine has received huge stockpiles of guided munitions from the West, such as Javelin anti-tank missiles that rely on over 200 semiconductors each as they home in on enemy tanks.

  • Transistors today cost far less than a millionth of their 1958 price thanks to the spirit expressed by the now-forgotten Fairchild employee who wrote on his exit survey when leaving the company: “I… WANT… TO… GET… RICH.”

  • “We’re not running out of atoms,” Keller has said. “We know how to print single layers of atoms.”