Politics of Technology: Chip War (I)
All technology has revolutionary implications for human life. Many are fairly benign, others quite radical, but all change previous life habits, some completely transform human society. The mid-20th century birthed two of the most radical technologies of human history. Both derived from the recently gained knowledge of quantum physics.
The first of these technologies revealed itself early one morning to a small gathering of its creators in the high desert of New Mexico with a synthetic dawn. A month later, the atomic bomb was more profoundly introduced to the greater humanity with the near instantaneous destruction of the Japanese cities of Hiroshima and Nagasaki. Creating new weaponry has always pushed technological development – stone arrowheads, metal swords, guns, and nuclear bombs, our lust to bestow death is a long proved innovation catalyst.
The second technology, the transistor, had a much less illustrious introduction two years later in the Bell Telephone Laboratories of New Jersey. Unlike nuclear weaponry, it would take several decades to begin understanding the radical implications of the transistor. Today, eight-decades after the birth of both technologies, it is still unclear which will prove more radically transformative to life on earth.
Today, transistors are becoming a focus of military doctrine, increasingly deemed a vital national security interest by the US National Security State (NSS). This story is told in the recent book, Chip War: The Fight for the World's Most Critical Technology by Chris Miller. The book would have been more valuable as a critique, but too often reads as dangerous advocacy for an outmoded view of national security. In a world where the very technology documented requires humanity to move beyond such dated, one could say ancient thinking, it bellicosely represents the opposite, defining a perspective of tech warfare good for neither the United States or the rest of the world.
The book does a fine job retelling the story of the development of the transistor, the creation of the integrated circuit, and our seemingly endless ability to pile more and more transistors upon a single silicon chip. Like every preceding telling, there's far too much gee-whiz adoration of the whole process. Don't misunderstand, I'm absolutely the last person to in anyway say the development of this technology has been anything less than incredible and historically significant. Going from a single transistor in 1947 to today's billions of transistors on single chip is in many ways sublimely fantastical. But we all need to move beyond awe and gain a better understanding of an entirely reasoned technology if humanity is to have any ability to effectively and healthily utilize this technology that increasingly defines the future.
Unfortunately, the book is written entirely from an American perspective, fitting a purpose to reconsider the technology a vital interest of national security. It promotes a lot of unhelpful conventional wisdom. For example, the idea the computer industry was overwhelmingly developed by laissez-faire American business know-how with little or no government help. This is largely done for a false comparison to the rest of the world's perceived reliance on government assistance. This leads to statements like, "California had plenty of engineers trained in aviation or radio industries who’d graduated from Stanford or Berkeley, each of which was flush with defense dollars as the U.S. military sought to solidify its technological advantage." Opposed to, "South Korea, and Japan, have elbowed their way into the chip industry by subsidizing firms.” US industry was “flush with defense dollars” versus other governments' subsidization.
From the beginning, the US government, particularly the military were essential funders and directors in the development of information technologies. Computers largely came out of the process of developing atomic weapons. Bell Labs was the result of a government bestowed monopoly, the entirety of their funding could be conceived a tax. Miller fails to mention it was the government's anti-trust consent decree in 1956 that forced Bell to license the transistor and other technologies they had developed. He even euphemistically writes, “AT&T, the owner of Bell Labs and of the transistor patent, offered to license the device to other companies for $25,000” – “offered.”
Miller does throw out simple facts such as, “The U.S. government bought almost all the early integrated circuits that Fairchild Semiconductor (one of the first chip companies) and Texas Instruments produced in the early 1960s.” But such facts don't fit well with the author's thesis of the US government falling asleep at the wheel while allied and enemy governments alike became active partners in the development of their industries. For the excellent under reported history of how integral from the very beginning the US National Security State has been to development of the computer industry read Yasha Levine's, Surveillance Valley.
Chip War is a very valuable guide to both the mindset and actions of American industry that led to the offshoring of much chip production over the last forty years. In this respect, the industry was in no way exceptional. This process resulted with chip design and development still overwhelmingly located in US companies and universities, but manufacturing largely off-shored to take advantage of cheaper labor costs.
The book does an excellent job explaining the importance of not only designing the chips themselves, but how the processes of manufacturing the chips have in ways been even more innovative. For example, lithography is the incredibly intricate process used to structure and manufacture the chips. Miller documents the mindset of the most iconic of American chip manufacturers, Intel, as they confronted innovating manufacturing and the dominant corporate globalization ethos. He writes,
“When Andy Grove was preparing to approve Intel’s first major investment in EUV lithography research in 1992, it was easy to see why even the chip industry, which had emerged out of the Cold War military-industrial complex, had concluded politics no longer mattered. Management gurus promised a future “borderless world” in which profits not power would shape the global business landscape. Economists spoke of accelerating globalization. CEOs and politicians alike embraced these new intellectual fashions.”
This elite “intellectual fashion” did not simply embrace corporate globalization, but crushed any and all alternative thinking. Corporate globalization they argued was a force as inevitable as gravity. Mr. Miller succinctly defines this dominant doctrine advanced for the past four-decades by America's latest best and brightest generation,
“In Washington and in the chip industry, almost everyone had drunk their own Kool-Aid about globalization. Newspapers and academics alike reported that globalization was in fact “global,” that technological diffusion was unstoppable, that other countries’ advancing technological capabilities were in the U.S. interest, and that even if they weren’t, nothing could halt technological progress. “Unilateral action is increasingly ineffective in a world where the semiconductor industry is globalized,” the Obama administration’s semiconductor report declared. “Policy can, in principle, slow the diffusion of technology, but it cannot stop the spread.” Neither of these claims was backed by evidence; they were simply assumed to be true. However, “globalization” of chip fabrication hadn’t occurred; “Taiwanization” had. Technology hadn’t diffused. It was monopolized by a handful of irreplaceable companies. American tech policy was held hostage to banalities about globalization that were easily seen to be false.”
The chip developed first in the US, then Japan, then relatively quickly its manufacturing became largely concentrated in a few countries including South Korea, and specially Taiwan. An interesting fact is that the Dutch company Advanced Semiconductor Materials Lithography (ASML) and the Taiwan Semiconductor Manufacturing Company (TSMC) dominate not for their chip designs, but their manufacturing prowess.
Most importantly, China, as of yet is not a major chip design or chip manufacturing power, is much more dependent than the US on other countries, but the author, in the oldest of National Security State artifices, existentially warns China's day is coming. Miller provides the fact undermining the book’s thesis,
“Across the entire semiconductor supply chain, aggregating the impact of chip design, intellectual property, tools, fabrication, and other steps, Chinese firms have a 6 percent market share, compared to America’s 39 percent, South Korea’s 16 percent, or Taiwan’s 12 percent, according to the Georgetown researchers.”
And,
“China’s vision of reworking semiconductor supply chains were staggering. China’s import of chips―$260 billion in 2017, the year of Xi’s Davos debut―was far larger than Saudi Arabia’s export of oil or Germany’s export of cars. China spends more money buying chips each year than the entire global trade in aircraft.”
In understanding the book's reasoning, the reasoning of the US National Security State, it's important to understand Japan, South Korea, Taiwan, and Holland, all part of the Pax Americana are non-threatening. All reside inside the area where American troops stopped at the end of WWII. China was briefly too, but Mao and the Chinese Communist Party seized power a few years after the war ended. For two and half decades, China shared with the Soviet Union the title of US Enemy #1. Then in the early 1970s came Mr. Nixon's rapprochement and for the next fifty years China became a sort of frenemy. For decades, US corporations, entirely unimpeded, moved a great deal of non-chip manufacturing capacity to China. Under the always skeptical, ever vigilant, paranoid eyes the National Security State a dangerous rival was being empowered.
Then came Donald Trump.
(Continued)