Chip War: The Fight for the World's Most Critical Technology

The winner of the 2022 Financial Times Business Book Award, “CHIP WAR” by Chris Miller gives a detailed review of the past, present, and future of the Semiconductor industry. The book is written in a thrilling style, flows easily, and is fun to read. I’m not going to summarize the book here; if you are interested you can even find published summaries/ articles about this book in publications such as Global Policy Journal, Foreign Affairs, or Forbes. This shows the importance of the topic and how chips became not only a driver of economic prosperity but also a vital role in national security, and geopolitical influence, making it a crucial component of a nation's strategic interests.

Microchips become as important to global capitalism today as oil. During most years of the 2000s and 2010s, China spent more money importing semiconductors than oil. China’s import of chips - $ 260 billion in 2017 – was larger than Saudi Arabia’s export of oil or Germany’s export of cars.

Unlike oil, which can be bought from many countries, the production of computing power depends fundamentally on a series of choke points: tools, chemicals, and software that often are produced by a handful of companies- and sometimes only by one. No other facet of the economy is so dependent on so few firms:

-????????? Chips from Taiwan provide 37 % of the world's new computing power

-????????? Two Korean companies produce 44 % of the world's memory chips

-????????? The Dutch company ASML builds 100 % of the world's EUV lithography machines, without which cutting-edge chips are simply impossible to make.

OPEC's 40% share of world oil production looks unimpressive by comparison.

Fun fact: Because vacuum tubes glowed like lightbulbs, they attracted insects, requiring regular “debugging” by their engineers.        

Experts expect the global semiconductor market to nearly double to US$1 trillion by 2030. The automotive semiconductor market is expected to grow even more strongly (to US$150 billion) over the same period. This offers great business opportunities for Bosch, and the company is relying on proven strengths to take advantage of them. ?Bosch has been making semiconductors for 60 years; Bosch’s MEMS sensors can already be found in half of all smartphones worldwide. And by 2025, every new vehicle is expected to contain an average of 25 chips from Bosch.

Bosch continues investing in the semiconductor technology around the globe. For example, the company recently built a new €65 million test center for chips and sensors in Penang, Malaysia, and plans to invest a further €285 million there by the mid-2030s. In the U.S., parts of the business of TSI Semiconductors in Roseville, California are to be acquired, and the factory there will be converted to accommodate state-of-the-art production processes for silicon carbide semiconductors at a cost of around €1.4 billion over the next few years. In addition, Bosch plans to take a 10% equity stake in a joint venture with TSMC, Infineon, and NXP, with the aim of constructing a 300-mm fab for semiconductor manufacturing in Dresden. And €3 billion is earmarked for the expansion of Bosch’s capacities in Dresden and Reutlingen by 2025.