NEW DELHI: Semiconductors hold the key to understanding the world today and will shape the future of geopolitics and technology in the time to come, one of the world’s foremost experts in the domain has said, noting that every country at present is reliant on someone else to source these building blocks of modern technology.
In a conversation with HT’s editor-in-chief R Sukumar on the second day of the 21st edition of the Hindustan Times Leadership Summit, Chris Miller, professor of international history at Tufts University, painted a broad picture of how silicon microchips sit at the heart of global economics and security and the future of technology, and how countries such as India can carve out their piece of the pie.
“All of the key trends that define our world are shaped by semiconductors, whether it’s the shape of the world economy, the rise of big tech companies, or AI — you cannot understand the world unless you have semiconductors at the centre of your analysis,” said Miller, who is the author of Chip War: The Fight for the World’s Most Critical Technology.
To illustrate his point, Miller said that China spends as much money importing microchips as it does oil, and that the most advanced hardware enabling artificial intelligence computing is by companies that are finding new ways to extract more from semiconductors.
“Right now, there’s not a single country in the world that is anywhere close to having a self-sufficient supply chain domestically, everyone is reliant on someone else,” Miller said.
In India’s case, Miller said the country stands to gain from its experience in semiconductor design. “I think taking major players head on is a very big challenge because they’re so well-established and have resources on their side, but the design expertise is something that I think holds a lot of opportunity to leverage because there’s so many different ways you can use it, so many different niches in which it can be expressed.”
Indian cities Bengaluru and Hyderabad are home to large operations of several multinational companies. In October, Google announced that its flagship Pixel smartphones are powered by microchips designed in India.
“India’s certainly has a very good chance of becoming a part of the semiconductor ecosystem. I think the questions will be — can that design ecosystem be further developed? Can more design focus firms be established in India?” Miller said.
Manufacturing, assembly and other supply chain initiatives “will indeed play a bigger role”, he added. “And the challenge is that there’s competition in every step of the supply chain. India is not alone. Most other major economies around the world are trying to build up their own semiconductor industries.”
Semiconductors are small, fingernail-sized devices that are to computing what cells are to a living organism. Today there are different types of semiconductors — some remember data and some process data. These chips are generally made of silicon onto which millions, often billions, of microscopic switches called transistors are carved using laser.
Semiconductor shortages are seen as a risk to both an economy as well as national security, since these are crucial to build everything from wireless routers to missile guidance systems.
China’s increasing dominance has been a matter of concern for the West. But Miller indicated the story is not as straightforward.” China is still hugely reliant on importing high-end chips from Taiwan, South Korea, Japan, and the US, but compared to 10 years ago, it imports less as a share of its overall consumption,” he said, adding that Beijing has managed this “in non-economically viable” ways. “It’s been happening because the Chinese government is pouring money really fast into the industry and that suits the interests of Chinese leaders who are concerned above all about security.”
As the world navigates these challenges from a politics and supply chain perspective, another challenge awaits in the evolution of technology and hardware, especially to keep pace with the sort of development that has taken place in recent decades.
“There are two different strategies for continuing to improve semiconductors: One is designing chips in new ways. Because if you don’t get more processing power per chip, you can still tweak your designs so that they’re perfectly suited…” Miller said.
“A second strategy is to bring different capabilities together on the same chip or in the same package. There’s an entire discipline of strategies that are often called the advanced packaging,” he added.
“I think the big challenge that the tech industry faces for the next decade is to apply artificial intelligence to the rest of the economy. We already see companies like open AI or Google beginning to try to understand what the killer use case of AI will be, but we’re still in the early stage of that process.”
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