Ship War: The Fight for the World’s Most Critical Technology won the Financial Times’ business book of the year award. Economic historian Chris Miller, a professor at Tufts, recounts the story of the ongoing battle for semiconductor supremacy.
It also provides a good explanation for why the semiconductor supply chain is the world’s most vulnerable supply chain.
Semiconductors go not into just computers and smart phones, but all manner of cars, trucks and planes. These are embedded in industrial machinery, home goods (like refrigerators), toys and advanced military devices.
“We rarely think about chips,” said Miller, “yet, they’ve created the modern world. The fate of nations has turned on their ability to harness computer power.”
As just one example of the criticality of semiconductors, China spends more money on importing semiconductors than oil.
Risk to the Chip Supply Chain is Centered in Taiwan
Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest contract chip manufacturer, and it is responsible for supplying semiconductors to most of the world’s largest technology firms. It produces the world’s most sophisticated chips. While Apple designs the most advanced chips for their smartphones, only TSMC can manufacture them. These chips are currently manufactured at a single site in Taiwan.
A semiconductor is a grid of millions, even billions, of transistors on a chip that has a diameter of 25 to 300 centimeters. TSMC can etch shapes into their chips that are smaller than a virus. It is a sophisticated manufacturing process that supports this incredible miniaturization. In short, it is manufacturing process that puts advanced foundries at the heart of the semiconductor supply chain.
“Fabricating and miniaturizing semiconductors has been the greatest engineering challenge of our time,” Miller said.
Click here to read the entire piece from Steve Banker in Forbes.