Book SummaryChip War, by Chris Miller

1-Page Summary1-Page Book Summary of Chip War

In Chip War, economic historian Chris Miller explores the rise of the semiconductor industry. Through his analysis and recounting of this history, Miller shows how semiconductor chips—the crucial components in electronics that control the flow of electric current—became the delivery mechanism for the binary code that powers our digital world and an indispensable input in all electronics. This includes everything from personal computers to household appliances to advanced weapons systems.

This ubiquity and utility has made chips a linchpin of geopolitical power and a resource that powerful actors have sought to control.

In this guide, we’ll explore:

• How a handful of researchers and entrepreneurs in the United States founded the modern chip industry in the immediate aftermath of World War II
• How Japanese companies emerged as the primary semiconductor rivals to the US beginning in the 1960s
• How Taiwanese firms—primarily led by giant TSMC—pioneered the foundry model
• How the People’s Republic of China emerged as a new geopolitical rival in the global semiconductor competition in the 21st century

Throughout the guide, we’ll supplement Miller’s analysis...

Chip War Summary Part 1: The Birth of Semiconductors

Miller writes that the modern chip industry traces its origins to the immediate aftermath of World War II, when a small group of engineers and entrepreneurs realized the vast military potential of semiconductors. This represented a massive opportunity with the rise of the Cold War in the 1940s and 1950s and the resulting unprecedented demands of the American military for new technology.

In this section, we’ll explore the Cold War context in which the discovery of semiconductors took place, the invention of the chip, its initial use in military and defense applications, and the rapid growth of the chip industry.

The Cold War Context

The Cold War was the backdrop—and ultimately the impetus—for the emergence of the semiconductor industry. After the devastation of World War II, writes Miller, the United States and the Soviet Union emerged as the world’s two military and geopolitical superpowers. Over the next half-century, the two nations and their respective allies and satellite states would wage the Cold War—a titanic ideological, economic, and political conflict.

As Miller notes, the Cold War competition underscored the US military’s need for technology to guide...

Chip War Summary Part 2: The Japanese Challenge

Following the emergence of the chip industry in the US in the 1950s, the early players soon found themselves in a global competition. As the 1960s and 1970s unfolded, the American chip industry faced new challenges from emerging actors—chiefly Japan. In this section, we’ll explore how Japanese entrepreneurs began to edge out American chip companies in the consumer electronics space, how the US private and public sectors responded, and how the US began to regain its footing in the 1980s.

The Emergence of Japan

As the American chip industry began to take off in the 1950s and 1960s, writes Miller, Japanese entrepreneurs saw the potential of the technology to create new private fortunes—and transform their war-ravaged country into an economic powerhouse.

Visionary figures like Akio Morita, who founded Sony, recognized the potential of semiconductors for the consumer market—not just military applications. Sony started out as a small electronics shop in 1946, but its commitment to innovation and engineering excellence eventually led to the development of many groundbreaking products, including the first transistor radio in 1955 and the first all-transistor television in...

Chip War Summary Part 3: The Rise of TSMC and the Foundry Model

Up to now, we’ve explored the rise of the semiconductor industry in the United States and the robust challenge to the American industry from the Japanese that began in the 1960s. In this section, we’ll turn our attention to the rise of Taiwan Semiconductor Manufacturing Company (TSMC) and the Taiwanese chip industry beginning in the 1980s, the resulting shift to the foundry model for chip manufacturing, the corresponding shift to the “fabless” model for chip design, and the decentralization and globalization of the chip supply chain.

Morris Chang Founds TSMC

In 1985, Chinese-born entrepreneur Morris Chang left Texas Instruments (TI) after being passed over for the CEO role. Spurned by the company to which he’d devoted his career, Miller writes that Chang decided to seize a different opportunity—to make Taiwan the new epicenter of the chip industry and place himself at its head. In 1987, he founded TSMC, a public-private partnership that would become the dominant global player in chip manufacturing.

Fortunately for Chang’s ambitions, writes Miller, the Taiwanese government was eager to develop a domestic semiconductor industry to reduce its reliance on foreign...

Chip War Summary Part 4: The Emergence of China

So far, we’ve explored the origins of the chip industry with a handful of American entrepreneurs after World War II, the emergence of the Japanese semiconductor industry in the 1960s, the rise of TSMC and the foundry and fabless models, and the globalization of chip manufacturing and design.

In this section, we’ll turn our attention to the increasingly prominent role of the People’s Republic of China in the global chip game. Specifically, we’ll look at China’s early attempts to establish an onshore chip industry; the recognition by Chinese leadership of the importance of semiconductors for the nation’s economic, military, and national security future; and the geopolitical concerns and challenges that China’s emergence as a major player in the chip industry has for the US and its allies.

China’s Semiconductor Ambitions

According to Miller, in the late 20th and early 21st centuries China embarked on a significant journey to emerge as a global player in the semiconductor industry.

The Chinese government had a vision of making mainland China a global semiconductor powerhouse. They believed China’s low labor and manufacturing costs could lure semiconductor investment to...

Shortform Exercise: Understand the Global Chip Competition

In Chip War, Chris Miller writes that control of the semiconductor industry is a linchpin of global geopolitical strategy. Use these questions to test your understanding of this issue and think about what it might mean for the future economy and international relations.

Why do you think semiconductors have become such a vital resource and source of competition and rivalry between nations?