The fates of Apple and Taiwanese semiconductor manufacturer TSCM have grown inextricably intertwined since the outstart of the iPhone. As each subsequent generation of iPhone hurtled past the technological capabilities of its predecessor, the processors that powered them grew increasingly ramified and specialized — to the point that, today, TSCM has wilt the only tweedle fab on the planet with the requisite tools and know-how to unquestionably build them. In his new book, Chip War: The Fight for the World's Most Critical Technology, economic historian Chris Miller examines the rise of processor production as an economically crucial commodity, the national security implications those global supply villenage might pose to America.

Chip War Cover
Simon & Schuster

Excerpted from Chip War: The Fight for the World's Most Critical Technology by Chris Miller. Reprinted with permission from Scribner. Copyright 2022.


Apple Silicon

The greatest payee of the rise of foundries like TSMC was a visitor that most people don’t plane realize designs chips: Apple. The visitor Steve Jobs built has unchangingly specialized in hardware, however, so it’s no surprise that Apple’s desire to perfect its devices includes executive the silicon inside. Since his primeval days at Apple, Steve Jobs had thought tightly well-nigh the relationship between software and hardware. In 1980, when his hair nearly reached his shoulders and his mustache covered his upper lip, Jobs gave a lecture that asked, “What is software?” 

“The only thing I can think of,” he answered, “is software is something that is waffly too rapidly, or you don’t exactly know what you want yet, or you didn’t have time to get it into hardware.” 

Jobs didn’t have time to get all his ideas into the hardware of the first-generation iPhone, which used Apple’s own iOS operating system but outsourced diamond and production of its fries to Samsung. The revolutionary new phone had many other chips, too: an Intel memory chip, an audio processor designed by Wolfson, a modem to connect with the lamina network produced by Germany’s Infineon, a Bluetooth tweedle designed by CSR, and a signal amplifier from Skyworks, among others. All were designed by other companies.

As Jobs introduced new versions of the iPhone, he began etching his vision for the smartphone into Apple’s own silicon chips. A year without launching the iPhone, Apple bought a small Silicon Valley tweedle diamond firm tabbed PA Semi that had expertise in energy-efficient processing. Soon Apple began hiring some of the industry’s weightier tweedle designers. Two years later, the visitor spoken it had designed its own using processor, the A4, which it used in the new iPad and the iPhone 4. Designing fries as ramified as the processors that run smartphones is expensive, which is why most low- and midrange smartphone companies buy off-the-shelf fries from companies like Qualcomm. However, Apple has invested heavily in R&D and tweedle diamond facilities in Bavaria and Israel as well as Silicon Valley, where engineers diamond its newest chips. Now Apple not only designs the main processors for most of its devices but moreover synchronous fries that run traps like AirPods. This investment in specialized silicon explains why Apple’s products work so smoothly. Within four years of the iPhone’s launch, Apple was making over 60 percent of all the world’s profits from smartphone sales, superincumbent rivals like Nokia and BlackBerry and leaving East Asian smartphone makers to compete in the low-margin market for unseemly phones. 

Like Qualcomm and the other tweedle firms that powered the mobile revolution, plane though Apple designs overly increasingly silicon, it doesn’t build any of these chips. Apple is well known for outsourcing turnout of its phones, tablets, and other devices to several hundred thousand turnout line workers in China, who are responsible for screwing and gluing tiny pieces together. China’s ecosystem of turnout facilities is the world’s weightier place to build electronic devices. Taiwanese companies, like Foxconn and Wistron, that run these facilities for Apple in China are uniquely capable of churning out phones, PCs, and other electronic. Though the electronics turnout facilities in Chinese cities like Dongguan and Zhengzhou are the world’s most efficient, however, they aren’t irreplaceable. The world still has several hundred million subsistence farmers who’d happily spike components into an iPhone for a dollar an hour. Foxconn assembles most of its Apple products in China, but it builds some in Vietnam and India, too. 

Unlike turnout line workers, the fries inside smartphones are very difficult to replace. As transistors have shrunk, they’ve wilt overly harder to fabricate. The number of semiconductor companies that can build leading-edge fries has dwindled. By 2010, at the time Apple launched its first chip, there were just a handful of cutting-edge foundries: Taiwan’s TSMC, South Korea’s Samsung, and — perhaps — GlobalFoundries, depending on whether it could succeed in winning market share. Intel, still the world’s leader at shrinking transistors, remained focused on towers its own fries for PCs and servers rather than processors for other companies’ phones. Chinese foundries like SMIC were trying to reservation up but remained years behind. 

Because of this, the smartphone supply uniting looks very variegated from the one associated with PCs. Smartphones and PCs are both assembled largely in China with high-value components mostly designed in the U.S., Europe, Japan, or Korea. For PCs, most processors come from Intel and are produced at one of the company’s fabs in the U.S., Ireland, or Israel. Smartphones are different. They’re stuffed full of chips, not only the main processor (which Apple designs itself), but modem and radio-frequency fries for connecting with cellular networks, fries for WiFi and Bluetooth connections, an image sensor for the camera, at least two memory chips, fries that sense motion (so your phone knows when you turn it horizontal), as well as semiconductors that manage the battery, the audio, and wireless charging. These fries make up most of the snout of materials needed to build a smartphone. 

As semiconductor fabrication topics migrated to Taiwan and South Korea, so too did the worthiness to produce many of these chips. Using processors, the electronic smart-ass inside each smartphone, are mostly produced in Taiwan and South Korea surpassing stuff sent to China for final turnout inside a phone’s plastic specimen and glass screen. Apple’s iPhone processors are made-up exclusively in Taiwan. Today, no visitor besides TSMC has the skill or the production topics to build the fries Apple needs. So the text etched onto the when of each iPhone — “Designed by Apple in California. Assembled in China”—is highly misleading. The iPhone’s most irreplaceable components are indeed designed in California and assembled in China. But they can only be made in Taiwan.