When the Chips are Down - A Deep Dive Into a Global Crisis

‘When the Chips are Down’ by Pranay Kotasthane and Abhiram Manchi dives deep into the ‘meta-critical technology’ of semiconductors. The modern data-driven society relies on integrated circuits, the computing workhorses on which modern gadgets and digital equipment depend for their functioning. Considered one of the small-yard high fence technologies by the American security establishment, its supply chain is a spaghetti bowl of its own.

Illustration by The Geostrata

According to S. Khan et al., a single computer chip passes through 1000 production steps and 70 international borders before it reaches its final customer and has multiple applications both in civil and military merchandise. 

The book is divided into eight chapters. The first two chapters set the stage for showcasing the growing protectionism in the chipmaking industry, mainly by the government and security establishment of the American state that was one of the earliest consumers of integrated circuits for the Apollo 11 program and Minuteman Missile program.

Chapter 1 digs deep into the ‘sliding scale’ approach getting diminished mainly due to the leapfrogging abilities of the new nations that have marked their position within the value chain of the global semiconductor ecosystem.

The chapter also covers the proactive approach of the Pentagon in ensuring private innovations thrive which can be leveraged so that the American military stays at the top of technologies with dual-use capabilities. 

An interesting observation that the authors made was in the narrative of ‘creative insecurity’, a concept adopted from Mark Taylor, meaning when a government is left to itself, its political discourses will deprioritize investments in innovations as domestic stakeholders fall reluctant to develop their ecosystems.

However, when external threats grow, a situation that the US faced twice: during the Cold War and with Japan in the 1980s, they were compelled to innovate or perish.

One example that fits best with this narrative was the development of microprocessor chips introduced by Intel as it lost the memory chip tug-of-war with the Japanese since they continued to cut down the price as their industry enjoyed strong national government support, a luxury that was not available to American chipmakers.

The introduction of microprocessor chips led to an overarching heterogeneous integration in the industry as the need for mainframe computers was replaced by relatively mobile yet hefty personal computers.

This made the rugged memory chips redundant as the life cycle of personal computers was shorter than the mainframe computers that Japan relied on for its market. Additionally, since microprocessors miniaturized the processing, the industry was free to think about developing user experience which led to the growth of Microsoft and Apple which created user-friendly interfaces without worrying about manufacturing them. 

One of the greatest literature gaps that the book fills is in understanding the political contexts in which the chip industry developed in non-western nations, mainly covered comprehensively in four chapters, each focusing on a particular geographical location. The book also dissects the complicated supply chain of the integrated circuit industry lucidly and comprehensively. The authors have done a great job of explaining the geopolitical contexts that led to the evolution of a specific supply chain within the nations.

The book is also an important body of literature for researchers focusing on Chinese studies. The authors have provided a 360-degree overview of the growth, evolution, and transformation of the Chinese semiconductor ecosystem, given the fact that it has always been a part of the global ecosystem.

However, strong policy support followed by dual-use capabilities of semiconductors makes integrated circuits a critical industry for China. Xi Jinping, in many of his speeches, has emphasized indigenising the semiconductor ecosystem of China to ensure self-reliance when the geopolitical spectrum of the world falls against China’s strategic calculations, a path that China is walking in current times.

The book, while considered as one of the initial literature that originates from India on one of the most crucial aspects of international relations, that is the correlation between technology, security, and global politics, still takes a lot of inspiration from the western articulation of the chip industry.

Regardless of this backdrop, it can still be considered a masterpiece for someone who intends to understand the significance of semiconductors and the leverage they provide to a national government that successfully intends to mark its place within the upper echelon of the global value chain.

Additionally, the book also explains the contemporary situation of the Indian semiconductor ecosystem to what they perceive as an ‘enigma’.

While the semiconductor ecosystem of India is decades behind, there is a growing hope in the popular lore about India being the next semiconductor hub given the fact that it provides political stability, homes a huge body of engineering talent and already holds critical stakes in chip designing. 

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BY NISARG JANI

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