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Tiny Chips, Giant Stakes · What's Your Problem?

• 0:15
  Speaker 1: Pushkin. This is a show about technological progress, and yet
• 0:26
  Speaker 1: in the year or so we've been making the show,
• 0:29
  Speaker 1: we have not had a single episode about the most
• 0:33
  Speaker 1: important driver of technological progress in the modern world. Semiconductors, microchips, chips,
• 0:42
  Speaker 1: as you know, are everywhere in the modern world, except
• 0:46
  Speaker 1: on What's Your Problem. I apologize for the oversight, and
• 0:50
  Speaker 1: we're going to fix it right now. I'm Jacob Goldstein,
• 0:57
  Speaker 1: and this is What's Your Problem. My guest today is
• 1:00
  Speaker 1: Chris Miller. He's a professor at Tufts University and the
• 1:03
  Speaker 1: author of a book called Chipboard, The Fight for the
• 1:06
  Speaker 1: World's most Critical Technology. The book explains not only how
• 1:11
  Speaker 1: chips have become a billion times more powerful over the
• 1:14
  Speaker 1: last several decades, but also how that extraordinary progress has
• 1:18
  Speaker 1: made chips ubiquitous and essential and increasingly something governments are
• 1:24
  Speaker 1: fighting over. The US government right now is fighting to
• 1:27
  Speaker 1: keep chip making technology out of China. Also, the US
• 1:31
  Speaker 1: government is spending tens of billions of dollars to get
• 1:34
  Speaker 1: companies to build more chip factories in the United States.
• 1:38
  Speaker 1: And on a related note, most of the world's cutting
• 1:41
  Speaker 1: edge chips, almost certainly, including the chips powering your phone
• 1:46
  Speaker 1: right now are made in Taiwan, a country that China
• 1:51
  Speaker 1: claims as part of its territory and that China might
• 1:54
  Speaker 1: invade or blockade or generally mess with in the coming years.
• 2:00
  Speaker 1: Chris writes about all of this, and we talked a
• 2:02
  Speaker 1: lot about it. But in order to really understand what's
• 2:05
  Speaker 1: going on now and how we got here, we started
• 2:08
  Speaker 1: out by talking about two companies, in particular, giant of
• 2:12
  Speaker 1: companies that are doing amazing things and that are absolutely
• 2:16
  Speaker 1: essential to the global economy. Also, almost nobody in the
• 2:20
  Speaker 1: US ever talks about either of these companies. The first
• 2:24
  Speaker 1: one we talked about is a Dutch company called ASML.
• 2:28
  Speaker 1: They make this amazing machine that you have to buy
• 2:32
  Speaker 1: from them if you want to make cutting edge chips.
• 2:35
  Speaker 1: Nobody else in the world makes this machine. The machine
• 2:38
  Speaker 1: uses a technique called lithography to print impossibly intricate chips.
• 2:43
  Speaker 1: To start, I asked Chris to explain how lithography has evolved.
• 2:49
  Speaker 1: So the way you do it is by using light
• 2:50
  Speaker 1: as your tool, and you shine light through a mask
• 2:55
  Speaker 1: that has the pattern you want to imprint on the chip.
• 2:59
  Speaker 1: So the light goes through where the holes are, it
• 3:01
  Speaker 1: doesn't go through where there aren't holes, and by using
• 3:04
  Speaker 1: essentially an upside down microscope at the outset, you could
• 3:07
  Speaker 1: take something that was big and make it look smaller,
• 3:10
  Speaker 1: just like microscopes usually take something smaller, make it like
• 3:13
  Speaker 1: when you look through the wrong end of a telescope.
• 3:15
  Speaker 1: That's exactly right, that's exactly right. So you basically take
• 3:19
  Speaker 1: sort of like a stencil, you stick it on a microscope,
• 3:23
  Speaker 1: you shine light through the microscope the wrong way, and
• 3:26
  Speaker 1: you you're able to basically print a chip that way.
• 3:32
  Speaker 1: That's right, at least that's how it worked in the
• 3:34
  Speaker 1: simple earliest days. So the challenge has always been to
• 3:38
  Speaker 1: print ever smaller features on chips. And for a long time,
• 3:42
  Speaker 1: visible light was perfectly acceptable printing device because it had
• 3:48
  Speaker 1: a wavelength of several hundred nanimeters and that's pretty small.
• 3:52
  Speaker 1: But a couple decades ago we got to the point
• 3:55
  Speaker 1: where chips already had features that were so small a
• 3:58
  Speaker 1: visible light wasn't small enough or powerful enough to do
• 4:01
  Speaker 1: the printing. So is that is yes, a wild moment, right,
• 4:05
  Speaker 1: So the idea that like these things on the chip
• 4:07
  Speaker 1: are so fine, so close together, that light is weirdly
• 4:12
  Speaker 1: too big, like they're smaller than the wavelength of visible light.
• 4:19
  Speaker 1: So this is the next problem. How does that get solved?
• 4:23
  Speaker 1: You need to make a jump to a very different
• 4:26
  Speaker 1: light source with a much smaller wavelength, And that's the
• 4:29
  Speaker 1: origins of the EUV, the extreme ultra violet lithography machines
• 4:33
  Speaker 1: that we have today. So ultra violet light has a
• 4:36
  Speaker 1: shorter wavelength than visible light, so therefore you can print
• 4:40
  Speaker 1: even smaller stuff on a chip. Extreme ultra violet is
• 4:44
  Speaker 1: presumably the short end of ultraviolet light, so you can
• 4:48
  Speaker 1: still get smaller and smaller. So we're in this world
• 4:51
  Speaker 1: where there's this one company, SML. Right, tell me about
• 4:54
  Speaker 1: this company, and tell me about the EUV machine that itselfs.
• 4:58
  Speaker 1: So the machines themselves create UV light by having balls
• 5:03
  Speaker 1: of tin thirty microns wide, so thirty millions of the
• 5:07
  Speaker 1: meter wide falling through a vacuum. Then, like, first of all,
• 5:10
  Speaker 1: what does that even me? Right? You say those words,
• 5:12
  Speaker 1: but like why it's what a ball of tin thirty
• 5:18
  Speaker 1: microns wide falling through a vacuum, Like what's even going on?
• 5:21
  Speaker 1: Why do you need falling balls of tin in a vacuum?
• 5:24
  Speaker 1: Because this tin, when you strike it twice with an
• 5:27
  Speaker 1: ultra powerful laser will explode into a plasma that is
• 5:33
  Speaker 1: forty or fifty times hotter than the surface of the sun,
• 5:37
  Speaker 1: and this plasma will release light with exactly the right
• 5:41
  Speaker 1: wavelength extreme ultra violet light needed for lethar. And so
• 5:44
  Speaker 1: then that light goes through some kind of a mask
• 5:47
  Speaker 1: or stencil and makes the imprint on a chip. Well,
• 5:51
  Speaker 1: the trick is that you need really unique mirrors that
• 5:54
  Speaker 1: the flattest mirrors humans have ever made to collect that
• 5:58
  Speaker 1: light after it's produced by the plasma. And there's around
• 6:01
  Speaker 1: a dozen of these mirrors inside of each machine that
• 6:03
  Speaker 1: then directs it towards the stencil and then onto the
• 6:07
  Speaker 1: silicon wafer. So okay, so that those are the basic
• 6:10
  Speaker 1: mechanics of the machine. How big is one of these machines?
• 6:14
  Speaker 1: What's it look like? The size of a truck? Okay?
• 6:20
  Speaker 1: And they look like they got wires and tubes of
• 6:24
  Speaker 1: all sorts coming out of them from every direction. They're
• 6:29
  Speaker 1: the most complex manufacturing tool humans have ever made. And
• 6:33
  Speaker 1: inside of them there are hundreds of thousands of component parts.
• 6:37
  Speaker 1: So you say it's the size of a truck, like
• 6:39
  Speaker 1: a like a pickup truck or like a semi truck.
• 6:41
  Speaker 1: What am I picturing like a semi truck. It takes
• 6:43
  Speaker 1: multiple airplanes to move one of these machines. Oh interesting, okay?
• 6:48
  Speaker 1: And how much does it cost? Around one hundred and
• 6:51
  Speaker 1: fifty million dollars apiece, So they're the most expensive machine
• 6:55
  Speaker 1: tool produced in human history. So okay. Because this machine
• 6:59
  Speaker 1: is so expensive and so complex, and because the market
• 7:03
  Speaker 1: for it is so small, right, only a few companies
• 7:06
  Speaker 1: in the world make truly cutting edge chips. We've found
• 7:08
  Speaker 1: it in this world where there is only this one
• 7:11
  Speaker 1: company ASML that makes this machine and that fact is
• 7:14
  Speaker 1: really important in terms of trade and geopolitics and lots
• 7:18
  Speaker 1: of other big things that I want to talk about that.
• 7:20
  Speaker 1: But before we do, I want to talk about one
• 7:23
  Speaker 1: other big important underdiscussed in the US company that also
• 7:29
  Speaker 1: has an acronym for a name. That company is TSMC,
• 7:33
  Speaker 1: the biggest chip maker in the world. So tell me
• 7:36
  Speaker 1: the story of TSMC. TSMC was founded by an executive
• 7:40
  Speaker 1: named Morris Chang who had spent his career at Texas
• 7:44
  Speaker 1: Instruments really building the US chip industry, and TI at
• 7:47
  Speaker 1: the time was one of the leaders in chip technology,
• 7:51
  Speaker 1: but he was passed over for the CEO job in
• 7:54
  Speaker 1: the middle of the nineteen eighties, was looking for something
• 7:57
  Speaker 1: else to do and was approached by the Taiwanese government
• 8:00
  Speaker 1: to help build a chip industry in Taiwan. And he
• 8:03
  Speaker 1: realized at the time that as manufacturing chips was getting
• 8:07
  Speaker 1: more complex and as the economies of scale to manufacturer
• 8:12
  Speaker 1: growing because you needed more complex equipment, more specialized materials,
• 8:17
  Speaker 1: that in the future there would be a market for
• 8:21
  Speaker 1: manufacturing services of semiconductors. And so he can see this
• 8:24
  Speaker 1: company not to design any chips. They've never designed chips.
• 8:28
  Speaker 1: They only manufacture, and they serve a large number of
• 8:32
  Speaker 1: companies from Apple to AMD to Nvidia that today don't
• 8:36
  Speaker 1: do any manufacturing. They only do chip design. And so
• 8:41
  Speaker 1: when people talk about like Apple zone chip, you know,
• 8:44
  Speaker 1: when Apple starts using its own chips, Apple's not making
• 8:47
  Speaker 1: those chips, right in the same way that they're not
• 8:49
  Speaker 1: making whatever the rest of the iPhone, right, they're designing
• 8:52
  Speaker 1: the chip and it's actually being made in a factory
• 8:55
  Speaker 1: in Taiwan. In fact, that's right, and I think if
• 8:59
  Speaker 1: you if you look on the back of an iPhone,
• 9:00
  Speaker 1: it'll it'll say designed in California, assembled in China, And
• 9:05
  Speaker 1: that's true, but it misses a critical step because all
• 9:07
  Speaker 1: of the key chips, not only in iPhones but in
• 9:10
  Speaker 1: most Apple products are manufactured by one company in Taiwan,
• 9:14
  Speaker 1: and so t SNC is now at the frontier, right,
• 9:18
  Speaker 1: they are making the smallest, most advanced chips. No US
• 9:24
  Speaker 1: company is any longer at that frontier. So in that
• 9:27
  Speaker 1: TSMC story, is there like a moment that is sort
• 9:32
  Speaker 1: of the key moment when the kind of center of
• 9:35
  Speaker 1: gravity and the chip world shifts from California to Taiwan. Yeah,
• 9:39
  Speaker 1: the key shifts was the smartphone. Steve Jobs actually went
• 9:43
  Speaker 1: to Intel when he was conceiving the iPhone and asked
• 9:47
  Speaker 1: if Intel will be interested in producing chips for this device.
• 9:50
  Speaker 1: But at the time it seemed a little bit crazy
• 9:52
  Speaker 1: to think that people would want computer sized processing on
• 9:55
  Speaker 1: their phone. Intel thought it'd be a low volume product
• 9:59
  Speaker 1: and said no thanks, and he took it to contract
• 10:03
  Speaker 1: manufacturers in East Asia instead, first producing it at Samsung
• 10:06
  Speaker 1: and then later turning to TSM to be the exclusive
• 10:10
  Speaker 1: producer of the iPhones chips. And it wasn't just Apple,
• 10:13
  Speaker 1: the entire smartphone ecosystem grew up alongside TSMC, and so
• 10:17
  Speaker 1: today TSMC produces on eighty percent of the world's smartphone processors,
• 10:23
  Speaker 1: and a typical smartphone will have a dozen semiconductors inside,
• 10:26
  Speaker 1: one for the Wi Fi, one for the Bluetooth, one
• 10:28
  Speaker 1: for the audio. And many of these ships are produced
• 10:31
  Speaker 1: by DSMC. So your background, you're a scholar, and your
• 10:36
  Speaker 1: background is basically in international relations, right, not in technology
• 10:41
  Speaker 1: your innovation. And it seems like that seems like an
• 10:46
  Speaker 1: extraordinarily interesting and useful framework for thinking about chips basically right,
• 10:53
  Speaker 1: for thinking about sort of global the global semiconductor industry today.
• 10:56
  Speaker 1: I mean, you have one company that's essential that's in
• 10:59
  Speaker 1: the Netherlands. You have another company, maybe the most important
• 11:03
  Speaker 1: company in the global economy if I wanted to be
• 11:06
  Speaker 1: found to reach for it, TSMC as in Taiwan. Taiwan
• 11:10
  Speaker 1: is an island right off of China that thinks it's
• 11:12
  Speaker 1: an independent country, but that China thinks is a part
• 11:15
  Speaker 1: of China. Semiconductors are like the most important thing in
• 11:18
  Speaker 1: the world economy right now. Maybe oil, but you could
• 11:22
  Speaker 1: make a good case for semiconductors, like that's a super interesting,
• 11:27
  Speaker 1: super complex, fraught situation. How should we think about it? Well,
• 11:32
  Speaker 1: I think you're right about how complex it is. And
• 11:36
  Speaker 1: what is striking to me is the extent to which
• 11:40
  Speaker 1: we think of industries like the chip industries being globalized
• 11:44
  Speaker 1: and they're international, but actually the production is concentrated in
• 11:48
  Speaker 1: a number of really key countries and companies. Joe Biden
• 11:52
  Speaker 1: was in the Netherlands a few months ago in part
• 11:57
  Speaker 1: to make sure that SML wasn't selling its fancy machines
• 12:01
  Speaker 1: to China, right, Like, that's how important it is that
• 12:03
  Speaker 1: the president is going to go there and be like,
• 12:05
  Speaker 1: thank you for not selling these machines to China. Please
• 12:08
  Speaker 1: keep not selling them to China. The Biden administration also
• 12:13
  Speaker 1: imposed restrictions more generally on selling chips to China. Was
• 12:16
  Speaker 1: the last year, like talk me through that, talk me
• 12:19
  Speaker 1: through China's role in in the global semi conductor industry. Today,
• 12:25
  Speaker 1: China produces a fair number of chips, but almost all
• 12:28
  Speaker 1: of them are pretty low tech, okay, And when it
• 12:30
  Speaker 1: comes to cutting edge chips, China's far behind the cutting
• 12:34
  Speaker 1: edge of what can be produced in Taiwan or in
• 12:36
  Speaker 1: the United States. And almost all chipmaking in China requires
• 12:41
  Speaker 1: machine tools like lithography tools from ASML, other types of
• 12:45
  Speaker 1: tools that are imported from abroad from the US, from Japan,
• 12:48
  Speaker 1: from the Netherlands, and because of that, the Chinese economy
• 12:53
  Speaker 1: is critically dependent on imported chips. It's trying to trying
• 12:57
  Speaker 1: to catch up. Are they gonna catch up? They've been
• 12:59
  Speaker 1: trying to catch up Since twenty fourteen, the Chinese government
• 13:03
  Speaker 1: has made some conductors a priority, pour billions of dollars
• 13:06
  Speaker 1: each year into the chip industry in China. But the
• 13:09
  Speaker 1: problem is it's really hard. It's really really hard to
• 13:13
  Speaker 1: acquire these capabilities. And it's hard because we're talking about
• 13:16
  Speaker 1: the most complex manufacturing humans have ever undertaken. The difficulty
• 13:21
  Speaker 1: that Chinese firms have faced are twofold. First is that
• 13:25
  Speaker 1: the market is so consolidated that breaking into it requires
• 13:29
  Speaker 1: enormous capital investment plus really unique technologies, and so it's
• 13:33
  Speaker 1: just hard to break into new markets when it comes
• 13:35
  Speaker 1: to the chip industry, which is why you've seen in
• 13:38
  Speaker 1: many segments of the industry, firms stay in their market
• 13:41
  Speaker 1: position for years, if not decades. And that's just an
• 13:44
  Speaker 1: environment where new entrance is hard, Like like making becoming
• 13:48
  Speaker 1: another SML, it's like kind of not going to impossible. Yeah,
• 13:52
  Speaker 1: that's right. Yeah. Yeah. The other issues that the US
• 13:55
  Speaker 1: government has been making it harder over the past around
• 13:58
  Speaker 1: five years by cutting off China's access to certain types
• 14:02
  Speaker 1: of tools, equipment, materials, software, and knowledge because now it's
• 14:09
  Speaker 1: illegal for USS and to work with certain Chinese semi
• 14:12
  Speaker 1: conductor companies and transfer knowledge to them. And the US
• 14:15
  Speaker 1: wants to do this because it's afraid that if China
• 14:18
  Speaker 1: develops more advanced shipmaking capabilities, it will apply these to
• 14:22
  Speaker 1: military and intelligence systems, which of course it would, That's
• 14:25
  Speaker 1: what all governments do, right exactly. So China wants to
• 14:33
  Speaker 1: make advanced chips, and Taiwan makes the most advanced chips
• 14:37
  Speaker 1: in the world, and China thinks Taiwan should be part
• 14:40
  Speaker 1: of China. In a minute, what does Taiwan's chip industry
• 14:44
  Speaker 1: mean for its relationship to China? In particular, what does
• 14:48
  Speaker 1: it mean for the possibility of a Chinese invasion or
• 14:51
  Speaker 1: annexation of Taiwan. That's the end of the ads. Now
• 15:01
  Speaker 1: we're going back to the show. In a more general context,
• 15:04
  Speaker 1: people talk about the possibility of China invading or blockading
• 15:10
  Speaker 1: or annexing Taiwan. How do you think about that in
• 15:15
  Speaker 1: the context of the chip industry. Some people argue that
• 15:22
  Speaker 1: China would want to attack Taiwan in order to acquire
• 15:25
  Speaker 1: the chipmaking facilities there. I think that's close to impossible.
• 15:29
  Speaker 1: The reality is that although Taiwan has unique manufacturing capabilities,
• 15:34
  Speaker 1: the facilities in Taiwan require importing machines from the Netherlands,
• 15:38
  Speaker 1: from the US, from Japan, they require importing materials like
• 15:42
  Speaker 1: silicon wafers and lots of ultraspecialized chemicals, and so they
• 15:45
  Speaker 1: really couldn't operate without regular imports from abroad. So I
• 15:50
  Speaker 1: think it's really really unlikely that China were to attack
• 15:53
  Speaker 1: Taiwan with the aim of seizing that you're making facilities,
• 15:56
  Speaker 1: because the Chinese leaders know that they be blown up
• 15:59
  Speaker 1: in the process. It wouldn't be possible. So China certainly
• 16:04
  Speaker 1: thinks Taiwan should be part of China, right, that's not
• 16:07
  Speaker 1: ambiguous independent of TSMC. So in a world where China
• 16:13
  Speaker 1: tried to make Taiwan part of China by force, what
• 16:16
  Speaker 1: would happen, Like, what is the sort of set of
• 16:19
  Speaker 1: probabilities you think about in terms of what would happen
• 16:22
  Speaker 1: to the chip industry and the global economy more generally
• 16:26
  Speaker 1: if there were attack on Taiwan or a blockade that
• 16:29
  Speaker 1: disrupted trade and out of Taiwan. The impact for the
• 16:33
  Speaker 1: world economy would be catastrophic. TSMC produces eighty percent of
• 16:37
  Speaker 1: smartphone processors, it produces a third of PC processors, It
• 16:40
  Speaker 1: produces all sorts of critical chips and data centers and
• 16:44
  Speaker 1: telecoms infrastructure, and then it produces tons of less sophisticated
• 16:49
  Speaker 1: chips that are critical for many other types of goods dishwashers,
• 16:53
  Speaker 1: washing machines, coffee makers, microwaves. A new car will often
• 16:58
  Speaker 1: have a thousand chips inside of it, and in a
• 17:01
  Speaker 1: given car, you should assume that at least twenty percent
• 17:03
  Speaker 1: of the chips are made in Taiwan. So when you
• 17:07
  Speaker 1: sort of think with your foreign affairs international relations training
• 17:12
  Speaker 1: about those implications, like, I could imagine that going different
• 17:16
  Speaker 1: ways in a kind of game theoretical way for China
• 17:20
  Speaker 1: right on the one hand would be like, oh, well,
• 17:21
  Speaker 1: we don't want to blow up the world economy. On
• 17:24
  Speaker 1: the other hand, it's like, oh, that's like a kind
• 17:26
  Speaker 1: of leverage. Right. We could say to the world, hey,
• 17:29
  Speaker 1: just let us make Taiwan part of China, because we
• 17:31
  Speaker 1: all know it's part of China, and we'll let the
• 17:32
  Speaker 1: chips keep flowing. I don't know, are those are those
• 17:35
  Speaker 1: the ways you think about it? How do you think
• 17:37
  Speaker 1: about it? The Taiwanese government describes the chip industry is
• 17:44
  Speaker 1: a silicon shield, the idea of being that China one
• 17:47
  Speaker 1: attack because it knows that the economic consequences would be
• 17:50
  Speaker 1: disastrous for China and for the rest of the world,
• 17:52
  Speaker 1: which it would be. And I think that dynamic is present.
• 17:56
  Speaker 1: But I worry as well that if China tries to
• 18:01
  Speaker 1: move on Taiwan in a way that's below the threshold
• 18:04
  Speaker 1: of what would necessarily trigger US response, so a partial blockade,
• 18:07
  Speaker 1: for example, which would present the US with a really
• 18:10
  Speaker 1: difficult calculus as to what to do. In that type
• 18:14
  Speaker 1: of scenario, US leaders would have a choice. Do you
• 18:16
  Speaker 1: do nothing and let China pressure Taiwan while watching US
• 18:20
  Speaker 1: credibility in Asia disappear, or do you do something and
• 18:25
  Speaker 1: risk a disruption of the supply chains on which the
• 18:27
  Speaker 1: world economy depends. And in that scenario, I think it's
• 18:30
  Speaker 1: far from obvious that the chip industry helps secure Taiwan,
• 18:34
  Speaker 1: and in fact, it could well deter the US from
• 18:37
  Speaker 1: helping Taiwan and therefore give China leverage over the United States.
• 18:42
  Speaker 1: So the US passed a law last year, the Chips Act,
• 18:46
  Speaker 1: which is basically subsidizing the manufacturer of chips in the US. Right,
• 18:53
  Speaker 1: tell me about that law. So, the Chips Act allocates
• 18:58
  Speaker 1: around fifty two billion dollars to semiconductors. Three quarters of
• 19:03
  Speaker 1: that goes to subsidizing chipmaking in the US, one quarter
• 19:06
  Speaker 1: goes to funding long run R and D. And the
• 19:10
  Speaker 1: idea behind the Act is that right now, it's it's
• 19:12
  Speaker 1: more expensive to build ship making facilities in the US
• 19:14
  Speaker 1: than an East Asia for a variety of reasons, government subsidies,
• 19:18
  Speaker 1: tax policy, regulation, etc. And the US wants to reduce
• 19:22
  Speaker 1: the cost gap and is putting government money behind that,
• 19:26
  Speaker 1: behind that to make it more competitive to build in
• 19:28
  Speaker 1: the US. There's real concern about what happens if China
• 19:31
  Speaker 1: does attackable like hate Taiwan, and in that scenario, we
• 19:35
  Speaker 1: need more chip making capacity in other geographies, not in China,
• 19:38
  Speaker 1: not in Taiwan. And so that's why Congress put money
• 19:41
  Speaker 1: behind the Chips Act to try to build some capacity
• 19:44
  Speaker 1: in other geographies. I feel like there's a there's a
• 19:48
  Speaker 1: bigger theme here that's interesting, right. An interesting theme is
• 19:51
  Speaker 1: the the relationship of the government to the private sector
• 19:56
  Speaker 1: and innovation more generally, and that's a theme that runs
• 19:59
  Speaker 1: through the history of the chip industry really and I'm
• 20:02
  Speaker 1: curious if you could just sort of talk it through,
• 20:05
  Speaker 1: you know today, how has that played out, and how's
• 20:08
  Speaker 1: it playing out today, and like, how do you see
• 20:12
  Speaker 1: that sort of optimal relationship there. The government's been deeply
• 20:17
  Speaker 1: involved in the chip industry from day one. It funded
• 20:22
  Speaker 1: a lot of the r and D that made chips possible.
• 20:24
  Speaker 1: It was the first buyer of chips for missile programs
• 20:27
  Speaker 1: and for the space race, and even today it's a
• 20:32
  Speaker 1: major funder of research and development the chip industry. But
• 20:36
  Speaker 1: it was never the forest that let the chip industry scale.
• 20:38
  Speaker 1: Selling to consumer markets was always more important in terms
• 20:42
  Speaker 1: of scaling because there's a lot more consumer demand than
• 20:45
  Speaker 1: government demand. Tim Cook, Apple CEO has a lot more
• 20:48
  Speaker 1: influence over this and nine country supply chain than the
• 20:51
  Speaker 1: US president because he buys a lot more expensive chips.
• 20:56
  Speaker 1: In the end, what do you think it's the fundamental
• 20:58
  Speaker 1: question of the book or what do you think is
• 20:59
  Speaker 1: the question the book ends up answering. I think the
• 21:03
  Speaker 1: key takeaway from the book is that although we don't
• 21:08
  Speaker 1: think about I can Inductor is much at all. They're
• 21:10
  Speaker 1: very deep in our devices. In fact, you can't understand
• 21:13
  Speaker 1: any of the major transformations in the modern world without them.
• 21:16
  Speaker 1: Whether it's the shape of the globalized economy, whether it's
• 21:19
  Speaker 1: the balance of military power, whether it's the rise of
• 21:22
  Speaker 1: big tech firms. All of them have silicon semiconductors at
• 21:27
  Speaker 1: their core, and they've structured all these big trends and
• 21:30
  Speaker 1: ways that until recently we were only dimly aware of.
• 21:36
  Speaker 1: In a minute, the lightning round, including where Chris thinks
• 21:40
  Speaker 1: the next silicon valley might be, and also what his
• 21:43
  Speaker 1: next book might be. Now back to the show. I
• 21:53
  Speaker 1: know you have to go relatively soon, so I want
• 21:56
  Speaker 1: to close with a lightning round a bunch of fast questions.
• 22:01
  Speaker 1: So you've studied the Soviet Union and Russia extensively, You've
• 22:05
  Speaker 1: lived and worked in Moscow. What's one thing that you
• 22:08
  Speaker 1: wish more people in the US understood about Russia. M
• 22:15
  Speaker 1: That's a hard question to answer, right, I mean, I
• 22:17
  Speaker 1: don't know if I don't know if you have a
• 22:18
  Speaker 1: good answer to that question in the context of this conversation.
• 22:21
  Speaker 1: Forget the context of this I mean, look, obviously, the
• 22:23
  Speaker 1: context for that question is the war in Ukraine. Frankly, Yeah, Okay,
• 22:26
  Speaker 1: well that's the context. Yeah. I think what's striking about
• 22:29
  Speaker 1: Russia is the extent to which the Russian foreign policy elite,
• 22:34
  Speaker 1: the people who make foreign policy in the Foreign ministry
• 22:37
  Speaker 1: in the Kremlin, they're convinced that their country is a
• 22:40
  Speaker 1: great power on the world stage, and they're convinced that
• 22:43
  Speaker 1: the way to make your country great power is to
• 22:46
  Speaker 1: assert it militarily and territorially. It seems to me like
• 22:50
  Speaker 1: a very nineteenth century or before view. The problem is
• 22:55
  Speaker 1: that it's here and now in the twenty first century,
• 22:58
  Speaker 1: and we can't wish it away. Every region wants to
• 23:04
  Speaker 1: create its own silicon valley, you know, there's like whatever,
• 23:07
  Speaker 1: Silicon beach, Silicon mountain. Everybody has their own bad name.
• 23:11
  Speaker 1: What place do you think has the best shot of
• 23:13
  Speaker 1: doing it? And why India right now is putting a
• 23:19
  Speaker 1: lot of money into its chip industry, and simultaneous to that,
• 23:22
  Speaker 1: it's putting a lot of focus on electronics assembly that
• 23:26
  Speaker 1: India is trying to attract assembly that's leaving China for
• 23:29
  Speaker 1: smartphones and PCs, and so I would say that although
• 23:32
  Speaker 1: it's starting from a very low base, India is likely
• 23:35
  Speaker 1: to substantially grow as chip industry over the next decade.
• 23:39
  Speaker 1: What's one thing research universities get wrong about fostering innovation.
• 23:43
  Speaker 1: Innovation is partly about science, it's probably about engineering, but
• 23:48
  Speaker 1: it's also probably about business models. The innovations that really
• 23:52
  Speaker 1: transform societies are those that have a business model that
• 23:55
  Speaker 1: allow them to proliferate. And universities aren't nearly as good
• 24:00
  Speaker 1: at producing business model innovation in the fact that I
• 24:02
  Speaker 1: do any of it, relative to producing engineering innovation or
• 24:08
  Speaker 1: innovation in fundamental science. I mean, maybe the question was
• 24:12
  Speaker 1: misguided as I hear you answer it, because like, maybe
• 24:14
  Speaker 1: a university shouldn't be in the business of innovating business models.
• 24:18
  Speaker 1: I guess there's a business school. But yeah, I think
• 24:21
  Speaker 1: that's right. I think if you look at TSMC, for example, TSMC,
• 24:26
  Speaker 1: you know, Morris Chang had no unique technological or scientific
• 24:32
  Speaker 1: insight when he started TSMC, But by starting TSMC, he
• 24:37
  Speaker 1: has transformed the landscape of the global chip industry. And
• 24:39
  Speaker 1: so I would put the founding of TSMC next to
• 24:43
  Speaker 1: many of the other key innovations of the twentieth century.
• 24:46
  Speaker 1: But it wasn't a Nobel Prize winning innovation, even though
• 24:49
  Speaker 1: it was areuably more important than many that have one
• 24:51
  Speaker 1: Nobel prizes. I mean, the fundamental innovation of TSMC was
• 24:56
  Speaker 1: we're not going to design chips. We're just going to
• 24:58
  Speaker 1: make chips that other people design. It was just that.
• 25:00
  Speaker 1: But that was huge, that's right, that's right, and it
• 25:03
  Speaker 1: was informed by all sorts of technical knowledge, but the
• 25:05
  Speaker 1: innovation was actually very simple and exclusively in the business model.
• 25:10
  Speaker 1: What was the second most important technology of the last
• 25:13
  Speaker 1: fifty years? Um, well, maybe this is a cop out answer,
• 25:20
  Speaker 1: but I think the development of the software that takes
• 25:25
  Speaker 1: advantage of chips bird most important. What's a good answer
• 25:31
  Speaker 1: to that. I don't know I've got a smart answer
• 25:33
  Speaker 1: to that question. I'll to think about that. Maybe genetic engineering.
• 25:38
  Speaker 1: But we haven't seen it payoff yet, Like if I
• 25:40
  Speaker 1: were going to it's kind of the obvious one, right, Like,
• 25:43
  Speaker 1: I feel like maybe in the next fifty years we'll
• 25:46
  Speaker 1: see that what has been happening in the sort of
• 25:49
  Speaker 1: biotech world is about to pay off in a really
• 25:51
  Speaker 1: profound way. You know, I'm I'm beginning to explore genetic
• 25:56
  Speaker 1: engineering as a potential topic for my next Wait, that's
• 25:59
  Speaker 1: my last question. What's your next book? Well? Yeah, so
• 26:03
  Speaker 1: I'm looking at at genetic engineering and the intersection of
• 26:07
  Speaker 1: biotech and aim as a potential next book. And if
• 26:11
  Speaker 1: you if you start with the thesis that DNA's just code,
• 26:15
  Speaker 1: then the intersection between computing and biotech seems really profound.
• 26:21
  Speaker 1: And the ways in which biotech has developed, both in
• 26:24
  Speaker 1: terms of the interplay between government and private companies and
• 26:28
  Speaker 1: also the international competition around it, also seems seems very important.
• 26:33
  Speaker 1: I think there's space to bring together some of these
• 26:35
  Speaker 1: big themes in a fresh way. Chris Miller is the
• 26:41
  Speaker 1: author of Chip War, The Fight for the World's most
• 26:44
  Speaker 1: critical Technology. Today's show was produced by Edith Russolo, engineered
• 26:49
  Speaker 1: by Amanda k Wong, and edited by Lydia Jeancott and
• 26:52
  Speaker 1: Sarah Nis. I'm Jacob Goldstein. You can email us at
• 26:57
  Speaker 1: problem at Pushkin dot fm, or you can find me
• 26:59
  Speaker 1: on Twitter at Jacob Goldstein. We'll be back next week
• 27:02
  Speaker 1: with another episode of What's Your Problem.