Electronic components with Chinese and US currency

Book review: ‘Chip War’ by Chris Miller

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The complicated story behind the international fight for the world’s most critical technology.

It may be one of the most important stress tests of influence on the world’s geopolitical stage but, when it comes to the battle for supremacy in the world of semiconductors, few of us put them on a footing with traditional commodities. We take it as read that oil influences global economic prosperity and international stability, and yet we seem unconcerned that China spends more on importing chips from Taiwan than it does on oil.

As Chris Miller points out in his compelling ‘Chip War: The Fight for the World’s Most Critical Technology' (Simon & Schuster, £20, ISBN 9781398504097), with everything – from consumer gadgets to automobiles, stock exchanges to power grids – relying on the ubiquitous integrated circuit, when markets become politicised the modern world finds its foundations, to use his word, ‘fragile’.

Miller’s premise is straightforward enough: while China tries to outmanoeuvre the rest of the world in the chip market in pursuit of a strategic upper hand, the likes of Japan, Europe and the US are fighting back by trying to increase production. But, making chips involves an international lattice of complex and fragile (that word again) supply chains, while the Chinese government invests billions of dollars into boosting its homegrown semiconductor industry.

The rationale is equally straightforward: if the Second World War was won by the industrial nations producing the most steel, and the Cold War standoff was decided by a race to develop the most sophisticated and reliable nuclear arsenal, victory in the 21st century’s silicon war will be gained by the combatant with the beefiest computing muscle.

Global military defence and computer chips go hand in hand, and Miller does well to keep his story firmly focused on this often-overlooked axiom. As he traces the history of microelectronics in the American states of Texas, Massachusetts and California, he also keeps a watchful eye on Washington. It’s all too easy to skew the tale in favour of the Hollywood narrative of geeks getting rich beyond their wildest dreams while wondering why Moore’s Law seems too good to be true. But, as Miller says, the economic reality is that while the chip industry grew in inverse proportion to its rapidly miniaturising transistors, unfathomably vast international markets emerged.

The Pentagon, he reminds us, can afford to build billion-dollar submarines and even ten-billion-dollar aircraft, but it can’t afford to design the integrated circuits that go in them. When these need to be imported from Taiwan, things get messy, proving that generating computing power "isn’t simply a story of science or engineering. Technology only advances when it finds a market. The history of the semiconductor is also a story of sales, marketing, supply chain management and cost reduction."

At its most basic level, ‘Chip War’ is an expert analysis of two competing ecosystems slugging it out over who can make the most and best chips. But as Miller says, there’s a lot more to it than that.

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