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Exclusive: Chris Miller on how the Cold War became the Chip War

Exclusive: Chris Miller on how the Cold War became the Chip War

Source:Chris Miller

In an exclusive interview about his book "Chip War: The Fight for the World's Most Critical Technology", American author Chris Miller gives first-hand analysis of why the core of contention among the world’s major powers is semiconductors, and what it could tell us about what the future holds.

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Exclusive: Chris Miller on how the Cold War became the Chip War

By Chen Liang-rong
From CommonWealth Magazine (vol. 763 )

【Semiconductor Century Conversation|Morris Chang x Chris Miller】Book your seat: https://bit.ly/3Yd6IUv

It is rare that a scholarly book on history elicits widespread attention and discussion immediately upon publication.

Chip War, by author Chris Miller, professor of international history at Tufts University’s Fletcher School, hit the shelves in the U.S. on October 4. Just three days later, the United States government instituted the strictest restrictions on semiconductor exports to China in history, including restricting the sale of advanced AI chips to China from Nvidia and AMD, slapping a ban on exports of 14 nm process and smaller semiconductor manufacturing equipment, and constraining U.S. citizens working in the semiconductor field in China.

These moves were generally interpreted as signals of U.S. intentions to “wipe out” China’s semiconductor industry.

The term “chip war” became a hot buzzword overnight, and the young history scholar made the rounds of all major U.S. mainstream media outlets. Chip Wars was named Business Book of the Year by the Financial Times, and CommonWealth has obtained the rights to publish the traditional Chinese edition, set for release in April 2023.

From US-USSR, US-China, to Russia-Ukraine, semiconductors at the center

Miller offers his perspective, perfectly interpreting this major shockwave: since World War Two, the world’s major powers have no longer clashed over steel or oil, but semiconductor technology.

For instance, the previous “chip war” saw the Japanese memory industry defeat America’s, forcing the U.S. to use political means to regain its leadership position. Even one of the critical factors of the Soviets’ defeat in the Cold War was the USSR’s failure at semiconductor mass production.

Miller holds a Bachelor’s degree from Harvard and a Ph.D in history from Yale. Prior to writing Chip War, his three previous books were all about Russian history; one about the Russian economy under Putin, and another examining the failure of late Soviet leader Mikhail Gorbachev’s perestroika.

Having immersed himself in the history of the Cold War for more than the past decade, what suddenly made him interested in semiconductors?

“That was a dramatic change,” he related. Around five years ago, he was thinking about writing a book on the history of missile technology during the Cold War. However, upon deeper investigation, he discovered that semiconductors were the central thread to the story.

Thereafter, as the U.S.-China technology war continued to heat up, “I realized that in both the competition between the U.S. and Soviet Union during the Cold War and now between the U.S. and China, the key in common is semiconductors,” he exclaimed.

Even in the war between Russia and Ukraine, Russia’s heavy reliance on semiconductor imports has once again become an Achilles’ heel.

(Source: Chien-Ying Chiu)

Thanks to his unique academic background, Miller is able to perceive things that most people overlook. The general narrative in the industry is that semiconductors are a great invention that have brought opportunities to prosper and changed human fortunes. In his eyes, however, it is full of conflict and bloodshed. This is the side of the semiconductor industry that remains unspoken.

For instance, Texas Instruments invented integrated circuit technology, which it used to make the first pocket calculator and market it around the globe. This is a familiar success story in industry circles.

However, in Miller’s view, this was just the beginning of the chip war. Texas Instruments’ first IC order was from the U.S. military’s Minuteman II intercontinental ballistic missile, a last-generation weapon of the Cold War era. Thanks to TI’s chip, which significantly reduced weight while raising computational capacity, the missile could be launched from within the United States and easily reach Moscow, thousands of kilometers away.

What insight does Miller, familiar with the push and pull of the semiconductor industry and regional politics over the past six decades, have to offer regarding the latest chip war entangling the United States, China, and Taiwan? The following is our exclusive interview, edited for brevity and clarity:

CommonWealth: Your previous books were mostly about history. Why did you have an interest in the semiconductor industry?

Miller: I had planned to write a book about the history of missile technology during the Cold War. And the more I learned about what defined high tech in missiles and what made missiles more effective in military terms from the 1950s up to the present, the more I realized that semiconductors were at the core of this story. 

While I was doing that research, the U.S. and China were beginning to experience growing tensions over their relationship. I came to realize that actually there was a linkage between the competition during the Cold War between the U.S. and the Soviet Union and the tech war, if you will, between the US and China today. And that link was semiconductors.

CW: The former Soviet Union's failure of obtaining chip technology played a factor in the loss of the cold war. Do you think China can avoid the same mistakes?

Miller: There are differences between the Soviet Union and China. One difference is that, unlike in the Soviet Union, China today has a large private sector. Second, although there is some isolation of China's chip industry and the US is trying to increase the isolation of its chip industry, the electronics supply chains more generally are very integrated into the overall economy. Despite the trend in terms of China's politics and in terms of the interconnections with the rest of the world towards a more Soviet-style system, China is still a lot more integrated and a lot more market-oriented than the Soviet Union ever was.

I think if Xi Jinping accomplishes all of his goals and moves China further towards that centrally planned version, China will face more problems. 

One of the things that we've already seen over the past decade, if not longer, is that the Chinese chip firms that have done the best are chip firms that have comparatively less government involvement. The more the government gets involved, the worse chip firms tend to do.

CW: Is China moving in the wrong direction?

Miller: Yes, I think the problem China faces right now is that all of the political incentives are pushing toward a more centralized, more politicized supply chain. When in reality, the successes that China has had in the past are due to the opposite factors. The government's hope in China is that they can compensate by pouring money into the chip industry. But I don't think money alone is enough.

They're going to need even more money than they're spending to domesticate all the different types of technologies if they are going to build a self-sufficient supply chain.

CW: The CCP was famous for its ability of self-correction. Do you think Xi Jinping will correct that direction?

Miller: In terms of semiconductors, China is actually doing worse today in many ways than it was before. If you look back ten years ago, the government was less involved in trying to manage the supply chain. There were a number of Chinese companies that were starting to play a much bigger and market-oriented role.

The best example is SAIC, which in its first decade after it was founded, was a commercially oriented company, mostly that was very integrated into the international supply chain, hired lots of employees from the U.S. and Taiwan, and had a lot of customers from abroad. 

Over the past decade, the Chinese government has gotten more and more involved in managing that firm. They provided more subsidies, too. But it is not catching up to where TSMC is. For example, in the last decade, SMIC has moved forward a little bit, but TSMC has moved forward more rapidly. 

That might have to do with the fact that the quality of governance has changed under Xi and there's less feedback from the private sector compared to ten or 20 years ago.

CW: Do you think the new sanctions on China imposed by Biden will weaken China’s defense technology?

Miller: Yes, on defense technology or military technology in general, including cyber security and intelligence rationales across defense, cybersecurity, and intelligence. There is increasing recognition in the US government that over the next decade the increasing capability of artificial intelligence will play a bigger role in defense systems and intelligence and hacking capabilities and in cybersecurity as well. 

Whichever countries have access to the most advanced artificial intelligence-enabled systems in the defense sphere, will have a real advantage.

It is not solely about any given missile system. If you're able to train more advanced A.I. models in more powerful data centers and then apply that to specific missile defense systems, you will have better results. 

Another example is drones. If you look right now, many countries are deploying drones around the world. Russia is buying drones from Iran and deploying them in Ukraine. But these are very different drones from what the US or China could field.

Iran's drones are very cheap. They use off-the-shelf technology. They're not very sophisticated. It's very different if you have a drone that has the capability to not only fly itself but maneuver itself to identify what's happening around it, to find targets, to approach targets, and to make decisions about them. Just like how a self-driving car requires a really good processor chip plus really good software. Two military systems already are starting to require that.

In ten years' time they will require a whole lot of that capability. These are capabilities largely provided by semiconductors. Older missiles like the Javelin anti-tank missiles, which are the ones that you fire over your shoulder that are 40 years old, they're all pretty basic in an advanced drone from today and especially in an advanced drone in ten years' time. They are going to be more reliant than ever on semiconductors, both in the device itself and in the data center that trains the software for how to fly or accurately identify things around it.

In the book Chip War, Chris Miller reveals how the semiconductor industry played the role of defending Taiwan in the past fifty years. (Source: CommonWealth)

CW: What is the background of using the semiconductor industry as protection of Taiwan from China?

Miller: In 1968, the U.S. was losing the Vietnam War. President Nixon was about to get elected on a platform of withdrawing military forces from across the Asia Pacific region. And there was already some discussion in the U.S. about shifting recognition from Taipei to Beijing. 

If you look at the Taiwanese government at the time, there was concern that as the U.S. did draw down from Vietnam, it would be harder for Taiwan to get U.S. support vis a vis the PRC. And so in the decision to try to attract U.S. firms to invest in Taiwan, it wasn't solely about jobs and investment, although it was certainly a part of it. 

There was also a strategic rationale that more U.S. investment would attract more U.S. attention. This was why Taiwan welcomed the investment of Texas Instruments.

The strategy led by people like KT Lee in Taiwan worked very well, not only for the economic benefits that are brought to Taiwan but also for putting Taiwan in the critical place that it is today in the world's tech sector. 

CW: Is the Arizona fab going to affect how TSMC is used to protect Taiwan?

Miller: I don’t think so, I've heard nothing about pressure from the US government to have a dramatic shift in where TSMC is producing the advanced semiconductors, and the Arizona facility is going to be fairly small. 

Right now it seems like the majority of TSMC production will still be in Taiwan. at least for the next five years.


Have you read?

Translated by  David Toman
Edited by TC Lin
Uploaded by Ian Huang

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