Chip War

In the summer of 2020, the USS Mustin, an American destroyer, sailed through the Taiwan Strait. On its own, this was routine—the strait is international waters, and the US Navy had been transiting it for decades. But this particular voyage happened at a moment of escalating tension between Washington and Beijing, and it was deliberately noticed. Chinese fighter jets shadowed the ship. State media issued warnings. The world watched two superpowers flexing their military muscle over a narrow strip of water.

But here's what most people missed. The real prize in that strait wasn't the waterway itself. It wasn't even the island of Taiwan, though that was certainly part of the calculation. The prize was something invisible, something you could hold in the palm of your hand: the semiconductor chips produced almost exclusively in Taiwan. Those chips power everything from the smartphones in our pockets to the guidance systems on the very warships sailing through those waters. And whoever controls them, controls the 21st century.

This is the central argument of Chris Miller's book Chip War: that semiconductors have replaced oil and steel as the primary strategic resource of our era. The shift from industrial might to digital supremacy has been quiet, but it's been absolute. In World War II, victory went to the nation that could produce the most tanks and ships. Today, victory goes to the nation that can design and manufacture the most advanced microchips.

Let me give you a framework for understanding why this is true. There are three criteria that make a technology a strategic asset in global politics.

First, irreplaceability. A technology becomes strategically important when there is no viable substitute for it. Semiconductors meet this test completely. There is no alternative to microchips for computing, communication, or control systems. You cannot run a modern military, a financial system, or a power grid without them.

Second, concentration of production. A technology becomes geopolitically explosive when its production is concentrated in a small number of locations. This is where the Taiwan Strait comes in. Taiwan Semiconductor Manufacturing Company, TSMC, produces over 90 percent of the world's most advanced logic chips. That single company, sitting on an island that China claims as its own territory, holds the global economy hostage.

Third, barriers to entry. A technology becomes a strategic choke point when it is extraordinarily difficult to replicate. Building a semiconductor fabrication plant costs tens of billions of dollars. The machines inside it, like the extreme ultraviolet lithography tools made by the Dutch company ASML, are the most complex devices ever built by humans. No single nation possesses all the expertise needed to produce them.

Now, let me show you how this framework works in practice. Think about the US-China rivalry that the USS Mustin's voyage symbolized. The United States has spent decades building a global semiconductor ecosystem that depends on American design software, American chip architectures, and American manufacturing equipment. But the actual fabrication of the most advanced chips happens in Taiwan and South Korea. China, meanwhile, has poured hundreds of billions of dollars into trying to build its own semiconductor industry, but it remains dependent on foreign technology for every step of the process.

This creates a strange kind of power. The US doesn't need to produce chips itself to control the supply chain. It controls the design tools, the intellectual property, and the export licenses for the machinery that makes chips. When Washington wants to cripple a Chinese company like Huawei, it doesn't send warships. It simply cuts off access to American semiconductor technology. The USS Mustin sailing through the strait was a show of force, but the real weapon was invisible.

Here's the takeaway that matters: control over semiconductor manufacturing and supply chains is the cornerstone of 21st-century national power. The nations that understand this—that invest in their own chip ecosystems, that build strategic alliances, that protect their technological advantages—will shape the future. The nations that don't will find themselves dependent on others for the most essential technology of our time.

Think about what this means for your own understanding of global events. When you read about trade wars, about export controls, about military posturing in the Taiwan Strait, ask yourself: who controls the chips? Because that's the question that will determine who wins.

The USS Mustin sailed through those waters in 2020. But the real battle wasn't on the surface of the sea. It was happening in clean rooms and fabrication plants, where microscopic transistors are etched onto silicon wafers. And that battle is only just beginning.