[Silicon chips power everything from cars and toys to phones and
nukes. “Chip War,” by Chris Miller, recounts the rise of the chip
industry and the outsize geopolitical implications of its ascendancy.]
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WHAT DO WE LEARN ABOUT CAPITALISM FROM CHIP WAR?  
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Rahul Varman
November 1, 2023
Monthly Review
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_ Silicon chips power everything from cars and toys to phones and
nukes. “Chip War,” by Chris Miller, recounts the rise of the chip
industry and the outsize geopolitical implications of its ascendancy.
_

Integrated circuit on a microchip., Jon Sullivan

 

It would not be an exaggeration to say that the chip has become an
essential commodity for economic development, just as steel was a
century ago. The subtitle of Chris Miller’s _Chip War_ itself
refers to “The World’s Most Critical Technology.” Chips are
central to the technology making our lives better—personal
computers, mobile phones, the Internet. In 2021, the computer chip
industry produced a greater number of transistors than all the goods
put together in human history.1
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Semiconductor chips truly are a marvel of human endeavor, and show the
extent to which we can go in harnessing the physical world. Today, an
iPhone12 is powered by an A14 processor, which contains around twelve
billion transistors carved into its silicon; a self-driving vehicle is
like a smartphone in the sense that specialized chips are key to its
functioning. The world’s biggest auto companies can use chips worth
more than $1,000 each in a single car.

The modern chip industry seems to represent the triumph of private
large corporations over state bodies. We hear constantly about
corporate players like Apple, Intel, Samsung, IBM, Facebook, Amazon,
and many more. Chips truly represent globalized production. As Miller
states in his preface:

A typical chip might be designed with blueprints from
the _Japanese_-owned, _UK_-based company called Arm, by a team of
engineers from _California_ and _Israel_, using design software
from the _United States_. When a design is complete, it’s sent to a
facility in _Taiwan_, which buys ultra-pure silicon wafers and
specialized gases from _Japan_. The design is carved into silicon
using some of the world’s most precise machinery, which can etch,
deposit, and measure layers of materials a few atoms thick. These
tools are produced primarily by five companies, one _Dutch_,
one _Japanese_, and three _Californian._… Then the chip is
packaged and tested, often in _Southeast Asia_, before being sent
to _China_ for assembly into a phone or computer.2
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_Chip War_ is informative, especially for those who are not familiar
with the specificities of the semiconductor industry, and provides a
broad understanding of an industry that is pivotal to the present
order. It gives readers a sweeping historical account of the shifting
technology, business models, and landscape of the critical
semiconductor industry and its ever-changing dominant forces and
actors. It presents the history of the industry since its beginnings
in the late 1940s, when transistors were invented at Bell Labs by
William Shockley and his colleagues, to the present day. In these
ways, the book rightly deserves the praise and excellent reviews it
has drawn from almost all corners, including leading think-tank
authorities, strategists, economists, and the military. But the most
instructive aspect of the book, even more than the rich details about
the semiconductor industry, is what one learns about capitalism.

All about Monopoly Capital

The first thing that we learn from _Chip War_ is that we are well
and truly in the age of monopoly capital. Perhaps this can be best
illustrated through the example of Advanced Semiconductor Materials
Lithography (ASML), a key producer of the photolithography machines
used to etch transistor structures onto silicon wafers. Dutch ASML was
started in 1984, when Philips spun out its lithography division. Once
Intel’s Silicon Valley Group was bought by ASML in 2001, it
established _complete_ control over the supply of photolithography
machines worldwide, without which no advanced chips can be made. Once
such monopolies are established, it is almost impossible to dislodge
them given the massive scales of capital expenditure required, perhaps
like no other industry in the world, and more so as the global economy
considerably slows down. At present, the global chip industry spends
over $100 billion annually on capital expenditure.

To elaborate on the functioning of monopoly capital in the
semiconductor industry, let us take the example of development of
ASML’s extreme ultraviolet light (EUV) lithography technology.
Miniaturizing chips requires harnessing EUV, which uses a wavelength
of 13.5 nanometers (one one-thousandth of the thickness of a sheet of
paper). Developing an EUV tool was one of the biggest technological
gambles of our times; every step required breakthrough innovations. An
EUV machine costs more than $100 million, with each component designed
to last at least 30,000 hours—that is, almost four years of
functioning. ASML personnel are posted on site for the entire life of
EUV machines for maintenance. These machines are, supposedly, the
“most expensive mass-produced machine tool in history.”3
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Years before ASML had produced a functional EUV tool, its biggest
customers—Intel, Samsung, and the Taiwan Semiconductor Manufacturing
Company (TSMC)—each heavily invested directly in ASML to ensure that
the company had the requisite funding to continue developing EUV
tools. Intel alone invested $4 billion, over and above billions of
previous grants and investments over the years. Mastering the
challenges to produce only the laser of the EUV tool took a decade, as
it needed the finest of mirrors, the likes of which had never been
made before. Each laser required 457,329 parts, with most of them
being sourced from different companies globally. As ASML produced only
15 percent of components for its machines in-house, it bought several
of its suppliers and invested in others in order to establish a
reliable global supply chain for the regular production of EUV
machines. This machine with hundreds of thousands of components, which
took billions of dollars and decades to develop, came into being in
the mid-2010s.

Elaborate Globalized Social Division of Labor

Monopoly capital does not entail monopolization of the entire value
chain by any single actor. Semiconductor production today requires an
elaborate division of labor at a global scale, without which not a
single chip can be made. Chips from Taiwan provide 37 percent of the
world’s computing power, just two South Korean companies produce 44
percent of the world’s memory chips, and Dutch ASML
builds _all_ EUV lithography machines. By the 2000s, the
semiconductor industry had split into three categories:

* Logic chips: Processors that run smartphones, computers, and
servers. Given the massive investments involved in EUV tools, only
three companies today make most of the logic chips: TSMC, Intel, and
Samsung.
* Memory chips: Dynamic random-access memory (DRAM) chips, used for
short-term computer memory. For these, an advanced fabrication
facility can cost $20 billion. Hence, there are only three major
producers today: Samsung and SK Hynix, both of South Korea, and Micron
in the United States. For flash (NAND) memory chips used for long-term
memory, Samsung supplies 35 percent; the rest come from South
Korea’s Hynix, Japan’s Kioxia, and the U.S.-based Micron and
Western Digital, which has facilities in Singapore and China as well.
* A more diffuse set of chips: This includes analog chips (such as
sensors), radio frequency chips, chips that manage electricity use in
devices, and so on. These are the chips that are more dependent on
design features for a specific task, rather than miniaturization.
Hence there are several analog chipmakers in the United States: Texas
Instruments, Onsemi, Skyworks, and Analog Devices, along with those in
Europe and Japan.

Perhaps the best example of this sort of global division of labor is
what Miller calls “the fabless revolution.” “Fabless” refers
to the outsourcing of chip production by the companies that design
them. This describes the reality that today, the most important U.S.
chip companies do not make even a single chip by themselves, and have
outsourced production mostly to the corporations of the Global South.
One instance is the case of the semiconductor company Nvidia, the
share price of which recently has become red hot. Nvidia has become
the most valued semiconductor company in the world in terms of market
capitalization. Founded in 1993, it specializes in 3D graphic
interfaces, parallel computing, and many other such high-tech
applications. In 2007, it released Compute Unified Device Architecture
software, which cost $10 billion to develop. Following the logic of
monopoly capital, the platform was released for free, but worked only
with Nvidia chips, which are manufactured by TSMC. Another leading
U.S. semiconductor company, Qualcomm, designs chips for moving voice
calls across frequencies. Qualcomm is built on millions of lines of
code, but the chips are fabricated by TSMC and Samsung. The UK-based
company Arm was a start-up in 1990, funded by Apple, but now is owned
by Softbank Japan. It sells its chip architecture to fabless design
firms, which in turn outsource the manufacturing to foundries like
TSMC. Arm found its niche in energy efficient portable devices like
mobile phones, which today make up the market for one-third of all
chip sales.

While Apple designs the main processor for an iPhone in-house, there
are a dozen of different chips involved in controlling various
processes on the phone: connecting with the cellular network; sensing
images and motion; battery management, and so on. According to Miller,
no company other than TSMC has the skills and capacity to
produce _all_ of these chips for Apple. “Designed by Apple in
California. Assembled in China,” etched on a phone, he writes, “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.”4
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Critical Economies in the Process of Production

Interestingly, what comes out of Miller’s account is that despite
the scale, automation, and capital intensity in the high-tech and
innovation-intensive semiconductor industry, it is as much about
surplus value extraction from the labor in production as anything
else. Cost-cutting in the production process is critical for the
competitive advantage of monopoly capital. Perhaps this is best
epitomized by the ruthless culture at Intel under Andrew Grove. In
order to supply microprocessors for personal computers, Taylorism was
systematically employed to improve the efficiency of twenty-first
century semiconductor production, very much like the automobile
industry a century ago. Pioneers of the semiconductor industry in
Silicon Valley like Fairchild Semiconductor employed women and
nonunionized workers and shifted production to relatively poor, less
unionized places in the United States in search of cheap wages. In the
1960s, the company relocated to places in Southeast Asia, such as Hong
Kong; Texas Instruments, Motorola, and others quickly followed.
Fairchild then moved to Singapore, where trade unions were practically
outlawed, then Malaysia, and so on. In fact, Miller goes on to say
that semiconductor/electronics jobs became a major force against
radicalization in Hong Kong, Singapore, Malaysia, Taiwan, South Korea,
and Philippines in the 1970s, during the heyday of both the Cold War
and a very hot war in Southeast Asia. However, this account
stereotypes Asian workers, and Miller uncritically quotes a group of
U.S. workers, who after a tour of Japanese semiconductor factories in
late 1970s, commented that a “foreman [in Japan] put a priority to
the company over his family.”5
[[link removed]] Micron,
started in Idaho in the 1980s, scored victories over both Silicon
Valley and Japanese rivals by making employees work in “sweatshop”
conditions.

Human Skills Are Central to the Semiconductor Industry

One may tend to believe that, with all the automation and technology,
human skills are marginal to the industry, but Miller reveals
otherwise. Not only are human skills central, but these skills have
been cultivated mostly as collective practices, either in public
institutions or through publicly funded programs. Early pioneers of
Silicon Valley, mostly young men, were educated in elite U.S.
universities such as Harvard, MIT, Stanford, and Berkeley. Perhaps
this is best epitomized in the magical and long career of Morris
Chang. Born in China in the 1930s, Chang grew up in Hong Kong; was
educated at Harvard, MIT, and Stanford; got involved in the early
building of Texas Instruments, worked with U.S. military, and,
finally, built TSMC from scratch. Institutions like the Semiconductor
Research Corporation and the Defense Advanced Research Projects Agency
funded programs at Carnegie Mellon and University of
California-Berkley that generated new industry start-ups and new
software-based chip design tools in the 1980s. These tools are now
used by the industry worldwide and are critical to the U.S. strategic
hold over the global semiconductor supply chain.

“Survival of the Fittest”

However, monopoly capital does not mean a lack of competition. In
fact, one finds cutthroat rivalry among the semiconductor players in
Miller’s account. Perhaps this is best exemplified by the decline of
Intel. Intel has consistently focused on short-term profits and cost
cutting since Grove’s early leadership. Despite being involved in
design and fabrication, they failed to have an edge in either, and
could not move into emerging applications, like mobile phones,
artificial intelligence, and data centers, which led to the rise of
rivals like Nvidia. By 2020, half of all EUV lithography tools funded
and developed by Intel were installed by TSMC, their archrival in
fabrication, while Intel had barely begun using these tools. The
decline of Intel happened in spite of a research and development
budget of more than $10 billion annually throughout the 2010s. Intel
could maintain its position only in the personal computing market, as
most PC architectures are defined by Intel’s x86 chip—despite more
efficient ones being available since the 1990s. Its hold is primarily
due to enormous switching costs involved for the industry in shifting
from one standard to another.

Intellectual Property Is a Key Tool for Monopoly Capital

Intellectual property figures prominently in _Chip War_, and its role
can be best summarized by what K. T. Li, minister of the economy of
Taiwan in 1968, told visitors from the U.S. semiconductor industry,
including Chang, at the time of a visit with Texas Instruments.
Intellectual property, Li said, was something that “imperialists
used to bully less-advanced countries.”6
[[link removed]] The
charge of so-called intellectual property theft is a weapon that is
repeatedly deployed by Silicon Valley to stave off any possibility of
competitors from any part of the world. For example, in the 1980s,
when Japan was regarded as “the Saudi Arabia of semiconductors” by
the U.S. chip industry, Japanese firms were regularly accused of
intellectual property theft, protected markets, and government
subsidies—including access to cheap capital.7
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Nation-States and Their Geopolitics are Omnipresent

Perhaps the most striking feature of _Chip War_ is the constant
presence of the state and rivalry among nations, notwithstanding all
talk of the state receding with the rise of global corporations.
Miller begins his argument with the shifting geography of the
semiconductor industry, starting with Silicon Valley, the failed
attempts of the USSR to catch up, then the rise of Japan, followed by
South Korea and Taiwan, and finally, includes a large part on
China-U.S. rivalry.

A 1959 CIA report assessed that the USSR was only two to four years
behind the United States in semiconductor technology. In 1962,
Zelenograd, Russia, received funding from Nikita Khrushchev dedicated
to the development of semiconductors, much like Silicon Valley. Miller
also reminds us of Soviet scientist Alferov Zhores, who shared the
Nobel Prize in Physics for his work on integrated circuits in 2000
with Jack Kilby for fundamental work done in the 1960s. In Miller’s
assessment, the USSR could never catch up due to a top-down,
militarized strategy of mechanically copying Silicon Valley’s model
and products.

Although the United States was loath to share its knowhow with the
Soviets, they were very willing to license technology to Japan to
entice it away from the communist camp. The postwar Japanese state
also played a key role. For instance, government-owned telecom
monopoly Nippon Telegraph and Telephone bought only from Japanese
firms. By 1990, Japan was making half of the chip-manufacturing
investment in the world. It also acquired a leadership position in
lithography machines—Nikon, for example, had a 70 percent global
share in 1980.

As Japan became a serious threat to U.S. dominance in the 1980s,
Silicon Valley began seriously lobbying against its technology
industry, seeking Washington’s support. Silicon Valley was closely
tied up with the military: no less than 17 percent of U.S. military
spending was solely for electronics hardware. All of this lobbying
resulted in significant cuts in the capital gains tax, pension funds
being allowed to invest in venture capital funds, and the tightening
of intellectual property rights, resulting in a rush of funds into
Silicon Valley start-ups. In 1986, the United States placed a quota on
Japanese chips. Japan’s share of DRAM chips declined from 90 percent
to 20 percent within a decade. As Japanese semiconductor
competitiveness declined in the 1990s, primarily due to global
geopolitics, Miller’s assessment is similar to his previous one of
the USSR. According to him, “Japan’s seeming dominance had been
built on an unsustainable foundation of government backed
overinvestment.”8
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One of the central moves in Silicon Valley’s strategy to outmaneuver
Japan was to cultivate South Korea. Samsung, emerging as a key
semiconductor player, made a huge investment in manufacturing and
began selling chips that it produced under the Intel brand. By 1998,
South Korea had become the largest producer of DRAM chips in the
world.

TSMC started in the mid-1980s as a Taiwanese state project, with the
government providing 48 percent of the start-up capital and bringing
in Chang to lead it. Chang was given a free hand, with the only
condition being to leverage his prestige and network in Silicon Valley
in order to find a chip firm that would be willing to provide advanced
production technology. Dutch multinational Philips put up $58 million
and transferred its production technology and intellectual property
license in exchange for a 27.5 percent stake in TSMC; the rest of the
capital was provided by wealthy Taiwanese individuals who were
“asked” by the government. Chang brought in most of the mid-level
hires, who had work experience with Silicon Valley companies such as
Motorola, Intel, and Texas Instruments; most of them trained at top
U.S. universities. According to Miller, to his potential customers,
“Chang promised never to design chips, only to build them” for
others.9
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Control over Key Choke Points by the United States

In all the din about outsourcing manufacturing from the United States,
what is often missed is U.S. control over key choke points in the
semiconductor supply chain without which not a single chip, at least
of the advanced variety, can be made. Moreover, the United States
maintains a stranglehold over chip design, intellectual property
rights, and the capacity to arm-twist other nation-states due to its
military and economic power. Within Silicon Valley there is a set of
corporate players with unique features, all of which have a monopoly
hold over critical aspects of the semiconductor supply chain:

* Applied Materials is the world’s largest semiconductor
tool-making company, building the equipment that deposits thin films
of chemicals on top of silicon wafers during processing.
* Lam Research has world-beating expertise in etching circuits into
silicon wafers.
* KLA Corporation has the world’s best tools for finding
nanometer-sized errors on wafers and lithography masks.
* Cadence, Synopsys, and Mentor are the three U.S. firms that
provide the software capable of laying out billions of transistors on
a wafer. Together, they control around three-quarters of the market.

The U.S. share in world chip production has been steadily declining,
from 37 percent in 1990, to 19 percent in 2000, and 13 percent in
2010. Even so, taking the value capture across the global
semiconductor chain, aggregating chip design, intellectual property,
tools, fabs (fabrication facilities), and so on, the United States
still captures 39 percent of the value, followed by South Korea (16
percent), Japan (14 percent), Taiwan (12 percent), and China (6
percent). One notable feature of the industry is that China is the
predominant sink of integrated circuit chips, importing $260 billion
worth in 2017. Integrated circuit chips made up 36 percent of
Taiwan’s exports in 2017, followed by 21 percent from the
Philippines, 19 percent from Malaysia, 17 percent from Singapore, and
15 percent from South Korea in the same year.

Each of the key nations is trying to increase its control over the
supply chain and get a degree of autonomy by having fabrication
facilities within its borders. Each one is also willing to offer
liberal subsidies to monopoly capital:

* In a close alliance between the South Korean state and Samsung, a
dedicated city for semiconductors is planned, where Samsung is to
invest $100 billion over a decade solely for logic chips, and a
similar amount for memory chips.
* TSMC is planning a capital expenditure of $100 billion in
2022–24 to modernize its existing facilities, as well as build new
capacity.
* The United States is pressuring each of these players to put up
facilities within its boundaries. Samsung has plans for a facility in
Austin, Texas, while TSMC is building a plant in Arizona. Thus, tens
of billions of dollars’ in the worth of fabrication facilities is on
the anvil to be located in the United States.
* Europe, Japan, and Singapore are also in the fray to enhance their
fabrication facilities.

War Is Ubiquitous

Another remarkable aspect of _Chip War_ is the way the idea of
actual war is normalized, so much so that one may almost miss that it
has anything to do with blood and gore and lives of people. In fact,
technology-driven modern warfare involves significantly more lives
(and deaths). The book begins with war-like confrontation in the
Taiwan Strait in 2020, then constructs a scenario wherein TSMC is hit
by a Chinese missile. Miller lays out how the interests of the
military establishment and Silicon Valley have been intertwined from
the beginning. In 1965, the U.S. Department of Defense bought 72
percent of all integrated circuits, though, within three years, as
many chips were being sold to the personal computing industry as to
the Pentagon. Miller claims that most of the bombs dropped during the
Vietnam War missed their targets, but claims one great positive
outcome for the industry—that it was a “successful testing ground
for weapons that married microelectronics and explosives in ways that
would revolutionize warfare and transform American military
power.”10
[[link removed]] According
to Miller, in the 1991 Iraq War, semiconductors were the “war
hero” guiding the U.S. missiles that flattened Iraq, and, by proxy,
Moscow’s technology sector, hitting targets with precision. However,
if we look at contemporary accounts at the time of the war, there were
serious questions raised regarding the accuracy of U.S. missiles in
Iraq, with a large number of civilian losses as a consequence.11
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The China Conundrum

The focus of _Chip War_ and, perhaps, the source of its title, is an
examination of the rivalry between China and the United States, and
the serious threat that the Chinese semiconductor industry apparently
poses to the preeminence of Silicon Valley. Almost a third of the book
is devoted to this subject exclusively.

In 1979, China had hardly any commercially viable semiconductor
production, and only 1,500 computers in the _entire_ country.
However, the country made rapid strides and, by the late 1980s, Huawei
started producing DRAMs that were similar to those of the early
’70s. Given that China’s attempts to find its way came with their
own twists and turns, it would be difficult to make any linearized
account of its struggle to find a toehold. Miller provides the example
of Grace Semiconductor, Shanghai, started in 2000, which was cofounded
by Jiang Mianheng, son of President Jiang Zemin, and Winston Wang, son
of a Taiwanese billionaire. Grace Semiconductor also hired Neil Bush,
brother of President George W. Bush, to advise on “business
strategies” for $400,000 annually. The company failed miserably. At
the same time, Richard Chang, formerly of Texas Instruments, set up
Semiconductor Manufacturing International Corporation, also based in
Shanghai, with a total of $1.5 billion in investments from Goldman
Sachs, Motorola, and Toshiba. It hired hundreds of foreigners,
including substantial numbers from Taiwan. Soon, they were receiving
job offers from foreign chipmakers, and it was listed on the New York
Stock Exchange in 2004.

China has been aggressive in its effort to acquire and develop
semiconductor technology. Given that China remains the biggest buyer
of semiconductors, chip companies cannot ignore it, and hence are
willing to transfer some parts of their technology to the Chinese
semiconductor companies and invest in subsidiaries in China. The
Chinese state, in turn, has been more than willing to raise capital
for these companies. Several global semiconductor corporations, such
as Qualcomm, Intel, Advanced Micro Devices, Arm, and IBM, have been
part of this process. Another notable attempt has been the development
of Tsinghua Unigroup, which was spun out of Tsinghua University in
Beijing in the 1990s. In 2013, Tsinghua Unigroup spent many billions
of dollars in buying China’s most successful fabless chip design
companies. By the following year, the group had struck a deal with
Intel to make smartphone processors. It also attempted to buy a stake
in TSMC, as well as Micron and other U.S. chip companies. In 2017,
Tsinghua Unigroup was planning new investments to the tune of around
$22 billion, funded by Chinese state-controlled financial
institutions.

Perhaps no other case better represents China’s aggressive
semiconductor pursuit than the rise of Huawei, which has been at the
center of all sorts of geopolitics in recent years. Miller quickly
dismisses the accusation that the rise of Huawei is due to
intellectual property theft and points to its $15 billion annual
research and development budget, one of the largest of any technology
company in the world. Though it had massive state support, Huawei was
willing to learn quickly from global business practices, then
outcompeted many of the largest Western corporations, such as Nortel
and Alcatel-Lucent. By the end of the 2010s, Huawei’s HiSilicon unit
was designing some of the world’s most complex chips for
smartphones, and had become TSMC’s second-largest customer (after
Apple). In Miller’s assessment, if this trend would have
continued—without political intervention from the United States and
other powerful states—“Huawei looked likely to play a bigger role
in the construction of 5G networks than any other company” in the
world, overtaking Ericsson and Nokia.12
[[link removed]] By
2030, China’s chip industry could rival Silicon Valley’s
influence. Quoting Miller, “This wouldn’t simply disrupt tech
firms and trade flows. It would also reset the balance of military
power.”13
[[link removed]]

The United States and Silicon Valley have gone into overdrive to stop
China from controlling more chunks of the global semiconductor chain,
beginning with the Barack Obama administration. The great
contradiction that they face is the fact that for every major chip
firm, the Chinese semiconductor industry also constitutes a huge
market, often a bigger customer than any other. Hence, Washington and
the U.S. chip industry are caught between trying to limit the Chinese
industry and maintaining trade relations. Miller cites several
examples of U.S. attempts at curtailing China:

* The United States has made serious attempts at breaking the
China-Taiwan semiconductor relationship, with China being Taiwan’s
largest semiconductor customer.
* In 2018, the United States banned key chip-making tools from being
exported to Fujian Jinhua from KLA, Applied Materials, and Lam
Research, which share an oligopolistic control over the supplies of
critical chip-making tools. Japan could have provided some of the
tools, but U.S. officials came to an understanding with the Japanese
government to constrain China. Fujian Jinhua was the most advanced
DRAM-producing firm in China, and, according to Miller, was
“destroyed” by this U.S. move.
* In 2020, the United States restricted any supplies from Huawei
that were made with U.S.-produced technology. Thus, “Huawei was
simply cut off from the world’s entire chip making infrastructure,
except for chips that the U.S. commerce department deigned to give it
a special license to buy.”14
[[link removed]] Huawei,
the world’s largest smartphone producer, was also blocked from
access to Android software.

Miller stops tracing these developments somewhere in 2020, but since
then, the U.S. government has, if anything, redoubled its efforts to
block China:

* In 2020, Semiconductor Manufacturing International Corporation and
many other Chinese companies were blocked from selling advanced
technology below ten nanometers.
* In 2022, Nvidia and Advanced Micro Devices were stopped from
providing chips for artificial intelligence to China. Further, the
United States cut off China from chips made _anywhere_ in the world
with U.S. equipment. In the same year, YMTC and dozens more Chinese
semiconductor firms were blacklisted.
* In 2023, the Dutch state curbed ASML from selling some of their
more sophisticated tools to China.15
[[link removed]]

In Miller’s assessment, there has been little retaliation by Chinese
firms, and Beijing appears to have accepted the role of a
“second-rate technology player.”16
[[link removed]] However,
since the end of Miller’s story, there have been concerted attempts
by multiple Chinese firms to respond to the U.S. ban. A few of them
are listed below, the first of which is discussed in _Chip War_, but
included here to provide a larger sense of the diversity of Chinese
efforts to overcome the U.S. ban:

* Chinese companies such as Alibaba are attempting to get out of
proprietary chip architectures such as the x86 for personal computers,
which is controlled by Intel and Advanced Micro Devices, or Arm
architecture for mobile phones, and bet on open-source RISC-V
architecture.
* With the help of local governments across China, Huawei and its
partners are working on new chip production and assembly networks in
Beijing, Wuhan, Qingdao, and Shenzhen, with investments estimated at
more than $55 billion.17
[[link removed]]
* Though Huawei’s net profits in 2022 declined by 69 percent in
comparison to the previous year—primarily due to the U.S. ban—they
still amounted to a substantial $5.18 billion. More significantly,
Huawei invested $23.5 billion in research and development alone that
year, an increase of 13.2 percent from the previous year, representing
more than 25 percent of Huawei’s total revenue for 2022.18
[[link removed]]
* According to a recent report, Huawei is second only to Qualcomm in
new inventions in wireless communication technology, with more than
twenty thousand patents.19
[[link removed]]
* YMTC is investing $7 billion to overcome choke points for
producing flash memory chips.20
[[link removed]]
* In an important development in September 2023, Huawei released a
new model of smartphone that it claimed was indigenously produced and
powered by a seven-nanometer processing chip produced by SMIC,
Bloomberg reported, in a “blow to US sanctions.”21
[[link removed]]

Further Issues

In the end, I will flag four further issues in _Chip War_:

* Miller’s account of the semiconductor world is uncritically
masculine, with phrases like “Silicon Valley’s testosterone fueled
competition,” and “real men have fabs.” It is also filled
overwhelmingly with male characters.
* Though at one level, the book is about the geopolitics of the
semiconductor industry, issues and events of macro political-economic
significance are missing. One of the most striking examples is that
the book does not even mention the 1985 Plaza Accord, which led to
massive appreciation of the yen and thus the significant decline of
Japanese competitiveness in the global market; in some ways, Japan has
never been able to recover from that “shock therapy.” However,
Miller’s assessment of Japanese semiconductor industry and its
decline conveniently neglects to discuss the accord.
* Toward the end, the book spends considerable space arguing that
China poses a significant military threat to the Taiwanese
semiconductor industry. It does not mention, though, that U.S.
strategists have been earnestly arguing for a scorched earth policy in
Taiwan, meaning that the United States should seriously consider
destroying TSMC plants in case of a credible threat from China, in
order to prevent the Chinese from wresting control over production.22
[[link removed]]
* The famed “Moore’s Law” figures extensively in the book. In
the 1960s, Gordon Moore, one of the industry’s pioneers, proposed
that the number of the transistors on an integrated circuit chip would
double every two to three years. This has become the industry mantra,
given exponential miniaturization and growth of computing power of the
semiconductors.

Though we learn a great deal about the semiconductor industry
from _Chip War_, Miller does not question the fact that there are
limits to exponential growth in the real world. Hence the substantial
questions raised by human suffering on a finite planet, faced with the
immediate catastrophe of the planetary crisis, ought to be asked
beyond _Chip War_, as we cannot expect their resolution from a system
determined by the logic of monopoly capital and imperialism that
Miller takes for granted.

Notes

* ↩
[[link removed]] Unless
otherwise stated, all information is from Chris Miller, Chip War: The
Fight for the World’s Most Critical Technology (New Delhi: Simon
and Schuster, 2022).
* ↩
[[link removed]] Miller, Chip
War, xxiv. Emphasis added.
* ↩
[[link removed]] It
is estimated that the EUV tools expected in the next few years will
cost at least $300 million. Miller, Chip War, 230.
* ↩
[[link removed]] Miller, Chip
War, 224. Emphasis added.
* ↩
[[link removed]] Miller, Chip
War, 84.
* ↩
[[link removed]] Miller, Chip
War, 63.
* ↩
[[link removed]] Miller, Chip
War, 98.
* ↩
[[link removed]] Miller, Chip
War,156.
* ↩
[[link removed]] Miller, Chip
War, 168.
* ↩
[[link removed]] Miller, Chip
War, 61.
* ↩
[[link removed]] See,
for instance, R. Jeffrey Smith and Evelyn Richards, “Numerous U.S.
Bombs Probably Missed Targets
[[link removed]],” Washington
Post, February 22, 1991.
* ↩
[[link removed]] Miller, Chip
War, 280.
* ↩
[[link removed]] Miller, Chip
War, 281.
* ↩
[[link removed]] Miller, Chip
War, 316.
* ↩
[[link removed]] “US
Targets China over Semiconductors
[[link removed]],”
Reuters, June 30, 2023.
* ↩
[[link removed]] Miller, Chip
War, 317.
* ↩
[[link removed]] Cheng
Ting-Fang and Shunsuke Tabeta, “China’s Chip Industry Fights to
Survive U.S. Tech Crackdown
[[link removed]],” Nikkei
Asia, November 30, 2022.
* ↩
[[link removed]] Arjun
Kharpal, “Huawei Reports Biggest Profit Decline Ever as U.S.
Sanctions, Pandemic Controls Hit Chinese Giant
[[link removed]],”
CNBC, March 31, 2023.
* ↩
[[link removed]] Frederick
Nyame, “The Race for Wireless Excellence: Qualcomm, Huawei, and
Ericsson Lead the Way,
[[link removed]]”
GizChina, June 30, 2023.
* ↩
[[link removed]] Che
Pan and Ann Cao, “Tech War: China’s Top Memory Chip Maker YMTC
Making Progress in Producing Advanced 3D NAND Products with Locally
Sourced Equipment
[[link removed]],”
scmp.com, April 23, 2023.
* ↩
[[link removed]] Vlad
Savov and Debby Wu, “Huawei Teardown Shows Chip Breakthrough in Blow
to US Sanctions,” Bloomberg, September 4, 2023.
* ↩
[[link removed]] David
Sacks, “Threatening to Destroy TSMC Is Unnecessary and
Counterproductive
[[link removed]],”
Council on Foreign Relations, May 9, 2023.

* integrated circuits
[[link removed]]
* electronics industry
[[link removed]]
* computing
[[link removed]]
* global economy
[[link removed]]
* Industrial policy
[[link removed]]

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