What’s the most constrained resource in the world? As the technology that built up Silicon Valley in the early 60s, microchips, with its ability to compute things more and more, are in most of the electrical equipments we use, from our phone to a missile. This book share the history and implication of the humble chips that have become so indispensable in our modern world to the point of being able to affect global events.
Some thoughts that I found fascinating:
- For such an important technology, most chips are only created by very few companies who have the economy of scales and technology to produce. For example, Taiwan’s TSMC produces 40% of new chip processing power worldwide. This of course makes Taiwan such an interesting geopolitical target between the US and China
- The chip manufacturing ecosystem highlights US’s strategy to tie the Eastern Asia countries to the US. By building up Japan, Taiwan and Korea as the chip producing hubs, the economy are then closely tied to the US-dominated hegemony
- Unlike Russia who went for a failed copycat strategy, China (Huawei) and South Korea (Samsung) went for a successful technology ramping strategy of i). Get cheap loans from your government; ii). Product and copy similar products for cheaper price and iii). Globalize quickly to compete against the best, learn, iterate and get better
- US, as has been seen recently, is executing the choke point strategy of chip equipments and software. This weaponized interdependence aims to subvert China and potentially drive a wedge as China will look to become more independent once it’s learnt enough
This is an interesting book to explain the subtext behind the US-China geopolitical struggle and how our world is so tied to this quite invisible technology, commercially and geopolitically.