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

by Chris Miller

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 building its own chips for PCs and servers rather than processors for other companies’ phones. Chinese foundries like SMIC were trying to catch up but remained years behind. Because of this, the smartphone supply chain looks very different 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 chips for connecting with cellular networks, chips for WiFi and Bluetooth connections, an image sensor for the camera, at least two memory chips, chips 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 chips make up most of the bill of materials needed to build a smartphone.