About The Book
Chip War by Weinersmith offers an insightful look into the evolution of computer chips. It examines the chip industry’s past and present, plus what the future holds. It’s a must-read for those wanting to understand the chip industry and tech driving it.
As you near the end of the book, you slowly come to understand the new power dynamics that are changing globally
Short Notes
The economy is largely based on advancing chips to higher levels, and Moore’s Law is the benchmark that companies strive to meet. High investment demand is sustained with the capital costs kept low due to government intervention. Currently, the chip fabrication market is dominated by Japan, Samsung, Taiwan, China, and Intel.
Monopoly players control the industry, and the US has considerable power due to its IP. India has virtually no role in the value chain, and the new Cold War will be centred around who controls the chips.
Long Notes
- Most of today’s economy is based on advancing chips to higher levels and Moore’s Law is the benchmark that every company strives to meet.
- Investment demand is high, due to the fast-paced changes in technology needed to meet Moore’s Law, but has been kept low due to government intervention via subsidies and low-interest capital to organisations
- Everything has moved to a ‘fabless’ model, where each player in the supply chain specialises in specific skill sets instead of doing it all.
- The current market for chip fabrication is dominated by
- Japan in DRAM, but has lost a large share recently
- Meanwhile, Samsung is the key player in Korea, focusing on memory and chips as a fabrication unit.
- Taiwan, home to TSMC which accounts for 90% of the world’s best chips and 37% of computing power, is also a key player
- China is limited to older generation chips, which have limited use in high-end computing but are important for military purposes
- The US is only represented by Intel, which is shifting gears to become fabless.
- The industry is controlled by monopoly players across the entire value chain, with each company dependent on multiple companies for the work but each component player is controlled by monopolistic players.
- Monopoly is created due to high capital needs and high learning curve needed for success.
- The US has a lot of power due to its IP, as seen with the Huawei and ZTE ban, which removed them from the market. Every country is keen to protect its current position and take share from others in an ongoing war. Russia in the 70s and 80s tried to copy via espionage as it did for nuclear technology but was not successful due to the monopolistic nature and lack of access to components regularly.
- Taiwan is at high risk of a Chinese attack, and the US would not benefit in the same way as it did in the 90’s since China has the quality to keep them at bay. The largest chip consumers are Chinese companies, giving them considerable soft power to counteract any blockades imposed on Taiwan. South Korea also faces similar threats from China and North Korea, receiving chip support from China for its ammunition development program.
- India has virtually no role in the value chain at present.
- The new Cold War will be centred around who controls the chips.