Chip War : Economics Battles Geopolitics
A review of Chris Miller's book on the history and geopolitical challenges of semiconductor manufacturing
Hi everyone and hope you're having a good weekend. I’ve spent the last couple of days reading Chris Miller’s Chip Wars, so as its largely a technology history, I thought that a review might be of interest to readers. If you’ve read it too, then please do share your thoughts in the comments.
Chip War, the new book by Chris Miller, is about the conjunction of semiconductor technology and geopolitics written from the perspective of a US policymaker.
It’s really two books in one. The first two-thirds of the book is mainly a history of the global semiconductor industry. The latter third focuses on the importance of Taiwan and Korea’s semiconductor industries, the rise of China and the challenges these present US commercial and military policy.
Chris Miller is Associate Professor of International History at the Fletcher School at Tufts University. He’s a scholar and writer on Russian History. One of the early themes of Chip War is the Soviet program to try to keep up with American technological development during the Cold War. This isn’t just a book about superpower rivalry though. Rather, Chip War tries to give the reader enough information about the history of semiconductor manufacturing to understand the forces that have influenced its development.
Does it succeed? I’d say, with some minor caveats, that it does. It’s comprehensive in scope. It provides a broad overview of the history of semiconductors from the 1940s to the present day. There are no great ‘sins of omission’ as it sweeps through decades and across continents and describes the rise and fall of the most important firms in the industry.
It’s well-researched. Miller has taken the time and effort to ensure factual accuracy. He doesn't shy away from technical explanations where these are needed. The book includes concise descriptions of key aspects of the manufacturing and operation of semiconductors. The inner workings of ASML’s lithography machines and FinFET transistors both get clear and engaging descriptions. The pen portraits of some of the key characters - Robert Noyce, Andy Grove and Morris Chang amongst them - are sympathetic and generally seem on point.
It’s also a real-page turner. Miller’s prose never gets bogged down. The chapters are short and the book proceeds at pace. It’s a book with spy stories that might appeal to a reader of spy thrillers. Despite knowing almost all the history already I found it an enjoyable read. I think it would be hard to write a more accessible history of the semiconductor industry for the general reader.
At this point, I have to emphasise that it is for the general reader though. It doesn't delve deeply into the technology at any stage. If you want detail on how the industry has progressed year by year and the technological changes that have made progress possible, then Chip War falls short. Equally, it is light on the commercial motivations driving some of the key decisions made by companies.
It’s also somewhat light on software. Nvidia’s investment in CUDA for its Graphics Processing Units gets a mention. Windows and x86 do too but the importance of the informal ‘Wintel’ alliance between Microsoft and Intel gets limited discussion. Cybersecurity and AI get some coverage but it’s at a very high level.
It’s also possible to take issue with some of the key geopolitical and military judgements. Did the ‘US’ win really the Cold War because of the chips in its precision-guided armaments? I think that the wider economic failings of the Soviet Union were probably a bigger factor.
The destination also influences the narrative. You can feel Miller focusing the book’s arguments towards one central question: What does the US do about China and Taiwan?
This isn’t surprising as it’s certainly the central focus of much debate in the US in Washington and beyond. It’s one strand in the ongoing wider debate about China. Eventually, the China question crowds out everything else.
It’s hard to disagree that this is a crucial question - it may be the crucial question - of the moment (see the footnote1 for just how topical this is) but there are other questions that possibly deserve more attention in the book.
Miller describes how military purchases of integrated circuits helped to kick-start the industry in the US. Later, the Taiwanese state’s role in founding TSMC gets appropriate coverage as does the Chinese state’s (variably successful) role in building its homegrown semiconductor industry. Despite this, the merits or otherwise of state support and intervention could get more attention in the book.
And in amongst the chips here is another product that looms large and yet receives limited focus in the book: the smartphone. Miller identifies the smartphone as being central to TSMC’s success. He castigates Intel for passing on the iPhone.
So I was left with another question. What happens when a mass-market consumer product like the smartphone becomes so important? Not just economically important but with technology that is strategically important. Crucially, what happens when that product requires huge ongoing investment and has massive economies of scale, factors that lead to the dominance of a small number of firms (or in extremis a single firm)? This is where was are now with ASML, Samsung and TSMC.
In this scenario, any firm (or any country) trying to catch up and keep up with the market leaders has problems. They don’t have the economies of scale that support the level of investment required. Intel became so successful because it made chips that were essential components of a major mass-market product, the personal computer. This created a virtuous circle of more investment and greater scale. Now the US finds itself outside that virtuous circle for key parts of the smartphone supply chain. So perhaps the challenges that the book sets out are also about geopolitics versus economics.
Would this matter if it weren't for the particular circumstances we see in Taiwan? Maybe not. Miller seems quite relaxed about ASML being in the Netherlands, a county that, from the US at least, is seen as stable and friendly.
But even if the single firm isn’t a geopolitical ‘chip choke point’ (to use Miller’s phrase) it is a technological one. If we are dependent on one or two firms to deliver progress then that seems problematic, to say the least. A lot now rests on what happens to a tiny handful of key firms.
All in all I’d recommend Chip War. Do let me know what you think in the comments.
If you’d like to hear and see Miller discuss Chip War there is the recording of Miller discussing the book at an event in Washington.
