The big war of the small chip
Diep Bao Canh
About the book "CHIP WAR" by Chris Miller
Semiconductor chips are the brains for everything from cars to toys to the refrigerator in your kitchen to phones and intercontinental ballistic missiles. Chris Miller's "Chip War" recounts the evolution of the chip industry and the enormous geopolitical implications of its development.
On April 19, 1965, an article with the title that only electronics engineers might be interested in—"Cramming More Components Onto Integrated Circuits" — appeared in Electronics, a trade magazine about the radio industry.
Gordon E. Moore, an electronics engineer, later Intel co-founder and author of the paper, used the word "cramming" to seem less serious, instead of the word "integrated" as we often hear, making people think it was just a "shouting slogan" by a young novice engineer. Who would have guessed that Moore's shrewd thinking had become a predictor of the entire future of computing, the same "trend" that was driving the chip world.
Most notably, the closing sentence in the paper "the number of transistors that can be integrated into a semiconductor chip doubles every two years." This quote is just a young engineer's prediction, it is not complicated formulas of physicists, but has been called "Moore's Law", because it has been proven impressively over the decades. Sixty years ago, four transistors could fit into one chip. Today — at the time Chris Miller published this book — it was 11.8 billion.
The appeal of "Chip War" from Tufts University history and international affairs professor Chris Miller, rather than technology expert Chris Miller, takes the reader as if he is following the pace of "Moore's law" as quickly as possible. The book has its last page, but the development of semiconductor chips and Moore's law has not stopped. "Chip War," which chronicles the development, popularization and strategic deployment of chip makers, enlivens everything from cars and toys and refrigerators to phones and nuclear weapons. Miller brings his expertise in the history of Russia, China, Japan and the Vietnam War to the stories of global monopolies from chip design to chip manufacturing to virus-sized precision tools to chip molding. And its applications for the Pentagon, to Tesla races, to iPhone races with rivals are "breathing air in the back of the head". The "Chip War" makes a special case: the chip industry now determines both the structure of the global economy and the geopolitical balance of power.
"Chip War" is not a technology textbook, much less an editorial, nor a forum for the persistent "who wins" debate. Because if so, the work will not appeal to the reader like the increasing heart rate of the audience watching the Mission Impossible series. The character Ethan Hunt in the Tom Cruise-led franchise was replaced by Sony creator Akio Morita; Lee Byung Chul - founder of SumSung; Morris Chang, the boss of TSMC (Taiwan Semiconductor Manufacturing Company); Ren Zhengfei - who leads Huawei to withstand many rings of needles she surrounds... The stories of the characters in the book are devoid of fiction, but more than enough to take readers from surprise to admiration for seemingly imposible twists.
The characters, though similar in character : "I... WANT... BIG... GET... RICH" (Chapter 6 title) but they are all eccentricly different.
Without thinking differently, Akio Morita cannot claim "The Japan that can say NO" (chapter 20 title, also the title of a book written by Akio Morita in 1989). When Akio gave up his role as the 15th-generation heir to a traditional sake distillery, to embark on an entirely new profession of cramming electronic components into a tiny radio, Japan was struggling to rebuild the country after the war, and is under auspices from the United States. Akio dares to say NO, so that SONY (and Japan) will not be pinched by companies and even the US government, to become a symbol of "delicious and cheap" utensils for Japanese, American and world consumers. It is also a symbol of Japan's strong economic recovery from the rubble. When Sony's Walkman flooded the U.S. and world markets, Akio was in his words: "While Americans train lawyers, Japan tries to train engineers." Japan's incredible success using American "core technology" to put chips in everyday objects has eclipsed names like William Shockley, a Nobel Prize-winning physicist for inventing transistors to replace vacuum ball switches.
Japan is also far ahead of Europe in its approach to the semiconductor chip industry with a story visualized as far back as 1962: when accepting the gift of a small "Made in Japan" transistor radio from a guest as small as Japanese Prime Minister Hayato Ikeda, French President Charles de Gaulle clearly did not feel interested in picking up the radio to smell. instead of turning on to listen, then moving on to something else. Since then, European electronics brands have given way to East Asian firms. In the chip technology chain, only ASML - a Dutch manufacturer of EUV photolithography, accounting for almost 100% of the world market share, has regained some honor for Europe.
Lee Byung Chul follows the motto "My Enemy's Enemy": The Rise of Korea (chapter 23), so that SamSung (and Korea) emerge as the third power to break the U.S.-Japan dual horse. Readers will surely be curious to know how he came from a merchant selling almost anything (p. 129) from selling vegetables, Lee Byung Chul has made Samsung a company that supplies 18.3% of the world's semiconductor chips, and 1/5 of mobile device users are holding Samsung phones. By identifying the products that the West and Japan already have on the market, SamSung produces with the same quality and lower price. At the same time, persistently building a globalization strategy, both expanding the customer network and improving perfection by competing with the best companies in the world. With such strategies, SamSung has become one of the largest companies in the world, with revenues equal to 10% of South Korea's GDP. (chapter 46)
Miller also used Part 5 "Integrated Circuits, Integrated World?" to narrate the story of investment strategy and geopolitical strategy to tie the prosperity of the world to the unbreakable supply chain from Taiwan Made Semiconductors as the name TSMC – Morris Chang has put it. At 91 years old, Morris Chang is still known as Zeus in ChipWorld, supplying 41% of the world's semiconductor chips. And grasp the most advanced chip manufacturing technology 3nm. Interspersed with purely economic calculations, it will satisfy readers who are interested in military and political positions with very subtle metaphorical analysis. It is easy to associate the Russia-Ukraine conflict with Taiwan sandwiched between U.S.-China competition. But Taiwan can not only not be caught between "losing your heart", but on the contrary, neither China nor the United States wants to lose heart when Taiwan is an advanced chipmaking power that cannot be easily replaced. Although the author does not offer any explicit policy proposals, his implicit message to U.S. policymakers is to recognize this relationship of both cooperation and competition.
Without reading CHIP WAR, everyone understands that the United States considers chip wars with Japan, South Korea, and Taiwan a thing of the past, and now must pull them together as allies against an opponent challenging for global No. 1 status – "Made in China" (chapter 42). Miller wrote CHINA'S CHALLENGE in season 5, representing the challenge from China, Ren Zhengfei and Huawei.
Ren comes from a military background, although Huawei has always insisted that he is a fully private company, has nothing to do with state capital, and has always denied U.S. accusations of serving the Chinese military. But Ren Zhengfei always took the soldier's fighting spirit into his will to commit himself to business. On the wall of a Huawei LAB there is a slogan: "Sacrifice is a soldier's highest cause." Victory is a soldier's greatest contribution – p. 273). Huawei is very different from what the world thinks of China, which bans Google, Facebook and other social networks if it refuses strict censorship from the government, or China is just a copycat economy. Ren Zhengfei always publicized Apple as his great teacher, nor did he hide from the media the iPad he was using. He also recalled how in 1997 he led a delegation of senior Huawei employees to visit HP, IBM, Bell Labs across the Pacific, to affirm the need for R&D, and to trust the effective management processes of the companies that came before them. In 1999, when sales were less than $1 billion, Huawei spent $50 million (5% of revenue) consulting costs and hired hundreds of IBM employees to streamline production management processes. As one consultant recounted, Huawei's team did not hesitate with any technological tasks, but they acknowledged that their economic and commercial knowledge was more than 100 years behind (p. 272). Yes, Huawei has "copied" the advanced management model into their strategy, to become one of the companies with the largest R&D spending in the world, $ 15 billion / year (that's the figure Miller took in 2020, in 2022 Huawei spent a total of $ 21.2 billion on R&D), the number that many countries need to invest in science and technology The country also does not dare to dream, and only a few technology companies like Google, Amazon, pharmaceutical companies like Merck can match. Huawei currently holds a total of 110,000 patents. In terms of 5G technology alone, Huawei registered a total of more than 6500 patents, ranking first in the world.
Miller also cites the case of just stopping copying Soviet technology in the 1960s, and the spy games of this period also came to life ("The KGB's Directorate T" chapter 25). Alfred Salant and Joel Barr, Communist New Yorkers and classically trained engineers at Stanford University, joined Julius Rosenberg's spy ring, fled to the Soviet Union, and helped found the Soviet computer industry. But the Soviet Union insisted on giving the semiconductor industry to state-owned factories, defense factories producing according to orders (at that time, the Soviet Union had no private factories) completely suppressing innovation at the speed of "Moore's Law". By the end of the Cold War, Soviet semiconductor technology had lagged behind by many levels.
Ren is also different from the majority of Chinese who perceive the difficulty of producing advanced chips. As in the foreword to the Chinese version of CHIP WAR published in China, Chinese scientist Wanweigang pointed out 3 misconceptions of many officials as well as of the majority of Chinese people:
First, a sufficiently large investment in human resources, with an equally scientific foundation ("one ship to Mars, 2 shells is an A bomb) will do anything others can do. Making chips is not like sending a spacecraft to Mars, or building an A H-bomb. Building an H-bomb, trying it 10 times just once, can become a nuclear threat, and the money to get the most state ammunition will pour in almost defiantly. But the chip that brings to market the probability of failure must be 0.000...%, and the cost must be cheap enough to compete in the market, which is a hurdle that is not easy to overcome. The war on technology is the next war of attrition ("Next Offset" – chapter 48) The US wants to bring China in, after the war of attrition in WW2 (chapter 1), the arms race in the cold war (chapter 28). As we all know, those two wars of attrition, the United States was the absolute winner.
The second deviation is that the Government must be leading in innovation, focusing on chip manufacturing projects as a national competitive strategy. Fortunately, after the trick of the century HANXIN CHIP, which cost billions of RMB, from officials to scientists of institutions. China has realized that innovation must be invested in private enterprise and in private enterprise. China has launched the Shanghai Stock Exchange Science and Technology Innovation Board (STAR MARKET) capital market on the Shanghai Stock Exchange. STAR is likened to the Nasdaq of the US, an effective investment channel for innovative technology satarups, attracting trillions of RMB of domestic and foreign private capital. The private capital market will be very "cold-blooded" to immediately eliminate inefficient projects.
Third, it is to be "autonomous" in technology. Self-control is right but unwise, and is always at the "bottom door" in the war of attrition in the technological race. US President Joe Biden, and German Chancellor Angela Merkel asked why car factories were forced to shut down after the Covid-19 pandemic? The answer is chip shortage. Chip shortage? Even more confusing, why not buy somewhere else? How to explain it thoroughly? A typical chip was designed by engineers in California and Israel on U.S. design software, which is patented by the UK-based company ARM, which in turn is Japanese-owned because it is invested by SoftBank. The blueprint is sent to a chip factory in Taiwan or South Korea, where it will buy ultrapure siliconns and specialty gases from another Japanese company, which will use it to carve billions of transistors into them by some of the world's most precise machines. It is possible to etch, deposit and measure layers of material with atomic size. These tools are mainly manufactured by five companies, one Dutch company, one Japanese company and three companies in the US. The chips are then pin-soldered, attached to the base, packaged and tested, usually in Southeast Asia including Vietnam, and finally sent to China for assembly into a circuit board.
"Chip Choke" is the grip that the U.S. wants K.O. to "dream China" of the Chinese. "Self-control" also means putting your head in the opponent's necklock. In this book, Miller also partly explains that Chinese people do not easily tolerate K.O. The eight-and-a-half-pound man, who can be both a competitor and a partner for mutual development. Ren Zhengfei, Huawei, and China understand the U.S. chess move well (don't know how to write it into a book?), and are taking steps to break their isolation with the "latecomer's advantage." Mr. Wanweigang pointed out the strategy: the opponent's clamp is good, if you can't break it, you can clamp the machine, take the attack.
CHIP WAR is still ongoing with no end. Lower resolution so.
As I write this introduction, on October 28, 2023, at the Innovation Center in the newly inaugurated Hoa Lac Hi-Tech Park, Viettel announces a fully "autonomous" 5G chip designed by Vietnam. It is not known how Viettel's 5G chip will be designed, but it is also good news for the beginning of Vietnam's semiconductor chip technology. Then also in October 2023, it was reported that AmKor inaugurated the group's largest factory in Bac Ninh with an investment capital of 1.5 billion USD. Earlier, when President Joe Biden visited Vietnam, leaders of both sides hoped that Vietnam would participate in the global semiconductor chip supply chain. Semiconductor chips are a hot topic, this book CHIP WAR, although it only carries technical expertise at a general level, will definitely be useful for those interested in the future of the economy not separated from the small chip.
The book does not contain any hints for a strategic model for entering the chip manufacturing chain. There's just one hint: to succeed in the big competition with this small chip has to be creative thinking. Creativity is never in the model of broken books.
Hopefully in the next edition of a book about some CHIP, there will be a Vietnamese name next to the names mentioned in this book.
Ho Chi Minh City, Oct., 2023
Note: The stories quoted, the figures I have outlined in this introduction, the author of the book with annotations of research papers, or interviews he has painstakingly collected, are specified in the end of the book. So I'm not making further notes here.