Chip War

In Chapter 29, Miller details the formation of Taiwan’s semiconductor industry under the leadership of Morris Chang, who was recruited by Taiwan’s minister, K. T. Li, in 1985. Chang, a former Texas Instruments executive, was tasked with transforming Taiwan’s role in the global chip supply chain, which had been limited to basic assembly. His vision led to the founding of the Taiwan Semiconductor Manufacturing Company (TSMC), a revolutionary chip foundry that manufactured chips designed by other companies, a new business model that reshaped the industry. TSMC’s rise was supported by the Taiwanese government’s financial backing and close ties to the US chip industry. Chang’s leadership and the foundry model helped Taiwan secure a dominant position in the global semiconductor market, especially as the demand for outsourced chip manufacturing grew in the 1990s.

Chapter 30 examines the challenges faced by China in its efforts to develop a domestic semiconductor industry. In contrast to Taiwan’s successful chip-making advancements, led by Morris Chang and Taiwan Semiconductor Manufacturing Company (TSMC), China was technologically backward and impoverished in the 1980s. Mao Zedong’s radical policies, particularly the Cultural Revolution, destroyed much of China’s scientific and technological capabilities. Scientists were persecuted, sent to farms for reeducation, and the idea of self-reliance in chip production was promoted, but China lacked the expertise and infrastructure to compete with global leaders in semiconductors.