Chris Miller: “Chip manufacturing is the most fascinating and complex problem in the history of mankind”

The sounds of New York accompany Chris Miller as he answers the phone. An unidentifiable public address, exchanges of good morning and, finally, the creak of a door closing and the silence of a room free of intruding noises. Professor of International History at the Fletcher School in Massachusetts, he has traveled from Boston to the Big Apple to speak on television about Chip War —The war of the chips—, a work that was born blessed by the Financial Times, which has included it in its list of best business books of 2022.

At 36 years old, Miller has put aside his studies on the USSR and Putin’s Russia, to which he devoted three essays, to immerse himself for five years in the universe of semiconductors, as relevant as it is labyrinthine, with economic, technological and geopolitical edges. . The meeting was fortuitous, when he verified its importance in missile guidance systems during the Cold War. But that was just the tip of the iceberg. “I realized that many of the trends I was interested in understanding, whether it was the workings of globalization, the structure of supply chains, or the future of military power, could not be understood without addressing its role.”

The latest controversy in the duel of superpowers between the US and China supports this excessive interest. Washington has just announced a blockade whereby no company will be able to supply Chinese companies with certain semiconductors if they carry US technology. The objective is to prevent Beijing from using them in the development of its own technology industry or in strategic areas such as supercomputers or next-generation weapons. “This is the most dramatic expansion of US export controls in a long time. Access to advanced semiconductors is a means of controlling which countries can build the most modern data centers, which will be crucial not only for artificial intelligence in commercial applications, but will also shape the military balance between the US and China.”

Miller’s chosen timing for the immersion—more than 100 interviews with scientists and other industry experts—could hardly be more auspicious. And not only because of the outbreak of the US-China conflict. These microscopic silicon components, present in vehicles, telephones, computers, and countless civil and military devices, have given much to talk about after the pandemic. Its scarcity, when consumers rushed to buy again after en masse, with more vigor if possible after the stoppage due to the virus, stopped car factories, and left millions of cars without going to market, causing brands multimillion-dollar losses and delaying deliveries to desperate customers for months and months.

It was then, being aware that neither Toyota, nor Volkswagen, nor the rest could give them the vehicle they asked for without those microprocessors to which almost no one had paid much attention until then, when the words chips and semiconductors entered everyday conversations. “Most people think that chips are inside computers, which is true. And it is one of its main uses. But you also find them in almost everything we touch that has an on/off switch, from microwaves to clocks to dishwashers. A mobile not only has the main chip that manages the operating system, but others for the camera, audio or Wi-Fi.

Miller draws several conclusions from those thousands of hours he has spent researching. “After researching its history and its creation process, I realized that chip manufacturing is the most fascinating and complex problem in the history of mankind.” We are talking about a technology that is measured in nanometers —smaller than the coronavirus that stopped the planet in 2020—, conceived in sophisticated industrial plants that cost up to 20,000 million dollars —that is the budget of the one that Intel is building in Ohio— and they need several years to be up and running, and that also depend on millimetrically defined supply chains, in a coming and going of materials that involves firms from multiple countries from design to manufacturing.

“It is very difficult and expensive. There are a small number of companies and countries that control its use, and that has huge economic ramifications, because if you are a company that is capable of playing such an irreplaceable role in the supply chain, you have an incredible market position. But also tremendous geopolitical ramifications, because they give certain countries access to them and have the ability to prevent others from getting the most advanced chips,” he explains.

In that select club the name of Taiwan resonates. TSMC operates there, the great giant of the sector, with a market capitalization of 350,000 million dollars —the equivalent of five times Inditex—. Miller quotes her 200 times in the little more than 400 pages of his book, which gives an idea of ​​his importance. The fact that it is in a hot spot due to territorial tensions with China, under the latent threat of an invasion, increases the feeling of vulnerability. “A single missile against TSMC’s most advanced factory would cause hundreds of billions in losses from production delays in phones, data centers, vehicles, telecommunications networks and other technologies,” he warns in the book.

Interior of one of the Taiwanese TSMC factories.

Interior of one of the Taiwanese TSMC factories.

If the concern for gas did not occupy the agenda of the Western political class until the clash with Russia, the attention for semiconductors did not either until they saw the ears of the wolf due to its scarcity. Now, plans to increase European autonomy with multimillion-dollar investments from Brussels are a reality. Spain intends to dedicate a maximum of 12,250 million to the sector until 2027, although it is not very clear how that spending will materialize. The EU seeks to reach 20% of the global microprocessor manufacturing quota by 2030 —currently around 10%.

For Miller, the mutual dependency will continue no matter how many funds are put on the table. The facts indicate so. The Dutch ASML —with a market capitalization that is almost triple that of Inditex—, for example, is an irreplaceable part of that gear as a manufacturer of the machinery necessary to produce the chips. “My advice to European politicians would be not to embark on some kind of self-sufficiency campaign that is unrealistic and propagandistic, because the reality is that Europe is going to depend on Japan and the US, just as they depend on Europe. That’s how complicated multinational supply chains are.”

A key piece in military supremacy

But this is not just an economic battle. Miller believes that military supremacy is at stake. “Future dominance will largely be determined by access to the most advanced computer chips, so it’s not just a matter of concern to finance ministers, but defense ministers as well. The future of military power will increasingly depend on semiconductors. If you look at autonomous drones, for example, they require a huge amount of computing power, memory, and artificial intelligence that needs chips. You only have to see those who carry the Russian missiles shot down and unarmed”.

And the sanctions to the regime of Vladimir Putin, are they reducing their ability to acquire them? “Russia faces quite severe restrictions on the types of chips they can buy, although it is not always easy to prevent them from buying them because they can go to the black market. We know that they are having a very difficult time getting what they need for sensitive systems like their satellites, and it will be increasingly difficult for them to get the semiconductors they need for their missiles or tanks.”

Meanwhile, in high-security laboratories where employees wear bulky protective suits, the work to take technology one step further does not stop. Miller thus describes the current state of that business battle. “TSMC is producing five-nanometer chips, and three-nanometer chips will follow soon after. Samsung and Intel are a little further behind and will take a little longer. Work is already being done on sizes of two nanometers and one will come later”. Smaller means more information in less space. And ultimately, the ability to create more advanced civil and military devices.

Previous articleWhat are Learning Styles? 14 Learning Styles and their Characteristics
Next articleHybrid learning: advantages and recommendations for teachers