Chip War

Chapter 8 recounts the Soviet Union’s attempts to replicate US semiconductor technology during the Cold War. Soviet leaders, desperate to catch up with the United States in technological advancements, adopted a strategy of copying American innovations, such as Texas Instruments’ integrated circuits. While the USSR excelled in theoretical physics and had some notable achievements, their “copy it” approach, led by Alexander Shokin, was fundamentally flawed. The Soviet Union lacked the sophisticated production processes, quality materials, and collaborative culture necessary for advancing semiconductor technology. Furthermore, as Moore’s Law pushed US chip companies like Fairchild and Texas Instruments toward constant innovation, Soviet efforts to replicate technology were slow. The chapter highlights the significant differences between Silicon Valley’s dynamic, open-innovation environment and the Soviet Union’s rigid, top-down system. Ultimately, the Soviets’ reliance on espionage and copying condemned them to technological backwardness.

Chapter 9 examines how Japan became a major player in the global semiconductor market through strategic innovation and partnerships with the United States. Post-war Japan, eager to rebuild its economy, embraced US technology, specifically the transistor, which would become the foundation of its booming electronics industry. Akio Morita, co-founder of Sony, played a pivotal role in obtaining a license to produce transistors and successfully marketed Sony’s transistor radios to the US and other global markets. Unlike the Soviet Union, Japan developed a symbiotic relationship with the US, with Japan excelling at manufacturing consumer electronics while relying on US firms for advanced chip design. This chapter highlights Japan’s unique approach, rooted in product innovation and long-term strategy, contrasting sharply with the Soviet Union’s reliance on imitation. The success of companies like Sony propelled Japan to global economic power.

Chapter 10 explores the labor dynamics of the semiconductor industry in the 1960s, highlighting the essential yet undervalued role women played in assembling early transistors and chips. While male engineers designed the devices, it was mostly women—especially in Asia—who performed the manual labor of assembling them. Fairchild Semiconductor, led by Charlie Sporck, began offshoring labor to regions like Hong Kong and Singapore to take advantage of lower wages and non-unionized workers. This move marked the start of semiconductor manufacturing globalization, as companies sought to reduce labor costs while expanding production. The chapter also touches on how gender and labor politics intersected, with women viewed as cheaper and more skilled at the detailed work needed for semiconductor assembly. This strategy played a crucial role in making semiconductors affordable and accessible, propelling the industry forward.

In Chapter 11, Miller details how Texas Instruments (TI) developed precision-guided munitions during the Vietnam War, revolutionizing modern warfare. While early bombing campaigns like Operation Rolling Thunder were inefficient, with bombs often missing their targets, TI’s development of laser-guided bombs drastically improved accuracy. Led by project engineer Weldon Word, TI used microelectronics to guide bombs precisely, with their first success being the destruction of the Thanh Hoa Bridge, which previously withstood hundreds of failed attacks. This chapter highlights the shift from older, unreliable weapons systems to cutting-edge guided munitions, driven by the semiconductor industry. Although the technological advancements didn’t alter the outcome of the Vietnam War, they laid the groundwork for future precision-strike capabilities, reshaping future US military tactics.

In Chapter 12, Miller discusses the geopolitical strategy behind Texas Instruments’ (TI) decision to move semiconductor production to Taiwan in the late 1960s. Facing rising labor costs in the US and political instability in Asia due to the Vietnam War, TI executives, including Morris Chang and Mark Shepherd, viewed offshoring as an economic opportunity. Despite initial tensions with Taiwanese officials, they realized that integrating with the US semiconductor industry could stabilize Taiwan’s economy and enhance its security. The chapter highlights how Taiwan and other Asian nations, including Singapore and Malaysia, leveraged semiconductor manufacturing to create jobs and grow their economies, thereby strengthening political ties with the US. By the late 1970s, these countries were deeply integrated into global semiconductor supply chains, ensuring lasting economic and strategic connections to the US, even after its military withdrawal from Vietnam.

In 1968, Bob Noyce and Gordon Moore left Fairchild Semiconductor and founded Intel, marking a turning point in semiconductor history. Their goal was to mass-produce transistors and memory chips, capitalizing on Moore’s Law, which predicted exponential growth in computing power. Intel’s first major breakthrough was the creation of DRAM chips, which became the standard for computer memory. Later, the company revolutionized computing with the invention of the 4004 microprocessor, a general-purpose chip for many different devices. This shift toward mass-produced computing led to an industrial revolution, shifting global power and influence to Silicon Valley. Visionaries like Carver Mead saw this new digital era as fundamentally reshaping society, with computing power becoming more ubiquitous and essential than ever. Intel’s engineers, rather than political radicals, were the true revolutionaries shaping the future.

In 1977, William Perry, a former Silicon Valley engineer, became the undersecretary of defense for research and engineering, recognizing the potential of semiconductors to revolutionize US military power. Faced with the growing Soviet military threat and America’s recent loss in Vietnam, strategists like Andrew Marshall envisioned a future where advanced computing, precision-guided weapons, and integrated systems would offset the Soviet Union’s numerical superiority. Perry capitalized on this vision by pushing the Pentagon to invest in microelectronics, which spurred advancements in guided missiles, radar systems, and sensors. The resulting “precision strike” capability marked a new era in warfare, where automation and advanced technology redefined military strategy. However, despite skepticism from critics, this strategy reshaped both American defense capabilities and global semiconductor supply chains. The rise of Silicon Valley’s chip industry intertwined with US defense and global economic power, with the future of military technology dependent on rapid advancements in computing power.