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When the Chips are Down

A review of Chip War: The Fight for the World’s Most Critical Technology by Chris Miller

For the last few months, there has been a steady drip… drip… drip… of hand-wringing articles about the pedagogical consequences of ChatGPT. This artificial intelligence (AI) chatbot has also trickled into our UM inboxes, with invitations to discussions and information on plagiarism guidelines.

It feels as though there is a shade of hysteria in the concern that students will use ChatGPT’s convincingly human-like answers to cheat in assignments - after all, isn’t it basically just a glorified search engine?

Apparently not. ChatGPT uses a different kind of algorithm to find and probabilistically infer the answers to our questions. I am not going to pretend I understand the kinds of algorithms that it trains on, but one thing I do understand is that they require lots of processing power.

AI algorithms are run on computer servers constructed out of semiconductor silicon processing chips. These chips provide the computing power which underlies our electronically dependent, digitally interconnected society. Despite this, we go about our days oblivious to the hundreds or even thousands of chips which surround us, hidden in all manner of electronic devices.

Photo by Brian Kostiuk on Unsplash

Chips, the structure of which is 10,000 times smaller than the breadth of a single hair, are miracles of design and manufacturing. How has it come to be that chips – which were only invented in 1947 – can now be mass-produced in the quality and quantity needed to run software like ChatGPT?

Chris Miller answers this question in his recent book Chip War. Miller chronicles the advent of the Silicon Age, the current historical epoch, which is characterised by silicon chips the same way the stone age was characterised by stone tools. In this book, one reads that no item has had a more decisive role on international politics than the silicon chip, determining the rise and fall of nations, shaping the military balance, forging globalisation.

Miller’s book is a great man history of the chip industry and the men, and they were almost all men, who imprinted themselves upon it. One such great man was Gordon Moore, whose eponymous Moore’s Law - the prediction that computational power would double every 2 years – set the standard for industry development. These interesting individuals tend not to be household names, but they are well represented by the character of Mr Fableman, the visionary computer engineer in Steven Spielberg's recent autobiographical film.

Miller’s book reads like a breeze, giving a fascinating depiction of an at times piratical industry. It is a tale of spying and theft, in which national governments are brought in to back up their nation’s chip giants. This aspect of the industry is laid out in one saga of chicanery, state-backed intellectual property theft and trade power. Miller recounts the events following the Chinese province of Fujian's decision to create a new chip company, Fujian Jinhua, in 2013.

I must ask you to bear with me here, this story is esoteric. It deals with companies no one has heard of and dull legal procedures. But it is nonetheless fascinating for what it tells us about what is going on when the chips are down in this high-stakes game. As Jon Ronson wrote in The Psychopath Test, “If you want to get away with wielding true, malevolent power, be boring” because journalists won’t want to write about you, and readers won’t be interested.

Lacking manufacturing expertise, the fledgling chipmaker Fujian Jinhua cut a deal with Taiwanese chip producer, UMC. Soon UMC began to poach staff from Micron, a champion of the US chip industry. Some of Micron’s former employees, whom UMC had hired, created a clandestine channel with their former colleagues, through which top-secret Micron production plans were passed.

By the time Micron realised what was going on, UMC and Jinhua had filed for patents for the stolen technology. When Micron sued them for intellectual property theft, they countersued in Fujian Province and won. Micron was subsequently banned from selling a large range of its products in China, the company’s biggest market.

Washington responded by banning Jinhua from buying manufacturing equipment needed for chip production, either from US companies or from companies which used US products. Within months Jinhua’s production lines ground to a halt.

As the bell rang to end the first round of conflict, and Fujian Jinhua was dragged unconscious out of the ring, the US was still standing strong. Washington had flexed its control over semiconductor supply chains to win this bout with China. However, the bell for the second round has just rung, and the pugilists are squaring off against each other once more.

I have more than a merely academic interest in this subject. Semiconductor supply chains are spread across the planet, however, they contain many chokepoints where single countries or even companies have very large – even 100% – market shares in crucial aspects of chipmaking. It was control over these chokepoints that enabled the US to floor Fujian Jinhua. My nation of Taiwan is just such a Thermopoylae.

Taiwan Semiconductor Manufacturing Company makes over a third of the world's chips and over 90% of its advanced chips. It is also one of the most geopolitically and geographically vulnerable locations in the world. Taiwan sits astride the fault line of two constantly grinding tectonic plates, and it is being perennially threatened militarily by its neighbouring continental superpower, China. However, the world’s reliance on Taiwanese chips gives many countries a strong vested interest in ensuring the island’s security.

This state of affairs is not mere serendipity. As Miller explains it was a deliberate, far-sighted defence strategy. In 1972 Taiwan lost its place on the UN permanent security council, its seat being taken by China. Further concerned by what the US withdrawal from Vietnam meant for its other security commitments, Taipei policymakers embarked upon a course of action that would give the world a powerful interest in its safety. This began by incentivizing US chip assembly companies to offshore to Taiwan and ended with a global dependence on Taiwan’s own semiconductor industry.

However, the US is no longer sanguine about its dependence on Taiwanese chips. Nor is it happy about the growing state-backed chip industry in China, its primary geopolitical rival. America is in a position to exert itself over all of the major chokepoints in the global chip supply chains, and it is not afraid to use this power as the case of Fujian Jinhua evinces. However, the US has gone further than merely standing up for its own companies in its weaponisation of the chip industry.

In 2019-20 the US, along with several other nations, banned the Chinese tech company Huawei from selling them and installing the telecommunications infrastructure needed for their 5G cellular networks. The US also imposed sanctions similar to those used against Fujian Jinhua. The ostensible reasons for this action were Huawei’s violation of trade sanctions with Iran and concerns over data security. However, as Miller explains these were just a sideshow. Washington’s real motivation was to thwart Huawei’s – and by extension Beijing’s – aspirations to become a cutting-edge chip manufacturer. The US’s action to crush Huawei was not truly a justified response to sanction violations and trade theft, rather it was done to ensure cutting-edge chip production remains in US control.

The silicon processor is to the digital age what coal was to the industrial revolution. As Miller says “we do not often think about semiconductors, but they do a lot of thinking for us”. However, since Miller’s book came out, I have noticed they have entered the public lexicon. The global economy is dependent upon constant improvements in computing power, but the industry which provides this is more precarious than we realise.

I am aware that the economic history of the semiconductor industry sounds dry. However, Chip War is a fascinating read that will expand one’s understanding of crucial events in 20th-century history. It gives an exciting account of a dynamic and relentless business with larger-than-life characters. It also explains what is really going on behind many of the events one reads about in the news, from Washington to the Taiwan Strait.

I have played with ChatGPT, and it is impressive. Like all of the gadgets and software which have changed the world beyond recognition over the last 20 years, ChatGPT is just an application of the most mind-bogglingly complex invention that has probably ever existed. It is the semiconductor chip which is shaping our world, the rest is just confetti.

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