[ExI] Why Silicon Valley Cares About Silicon Again Chip shortage gets all eyes in tech back on semiconductors

John Grigg possiblepaths2050 at gmail.com
Sun Aug 15 19:02:33 UTC 2021

"Chips are sexy again, after years of hiding behind the scenes. That's what
NBC's Bay Area journalist Scott Budman says. And tech historian Michael S.
Malone <https://us.macmillan.com/author/michaelsmalone/> agrees.

"There's a reason it's called Silicon Valley," says Malone, author of *The
Big Score: The Billion Dollar Story of Silicon Valley*, and about a dozen
other books about Silicon Valley's people and companies.

"Chips matter," he continued, "because everything flows from that. We get
excited about new products and companies, but they all depend on chips
getting built, and right now they aren't getting built. You can't get a
Ford F150 [truck], the most popular vehicle in U.S., because they can't get
the microprocessor for the engine computer."

Malone and Budman were speaking as part of the Computer History Museum's
<https://computerhistory.org/> CHM Live
<https://computerhistory.org/chm-live/> series of virtual events.

It was a chip crisis
the 1980s that helped put Silicon Valley on the map in the first place,
Malone pointed out.

"The Japanese came rolling in with chips that were better than ours," he
said. "I was at an event where a guy from H-P showed quality charts,
Silicon Valley chips vs. Japanese chips, and [the Japanese chips] were so
much better and cheaper than ours. That's when the battle with Japan put
Silicon Valley on the map as a crucial part of the American economy"

But then times changed, thanks to the increasing importance of software.
"The Valley had a fundamental shift between hardware and software, between
the electrical engineers and the code writers," Malone said. The customers
changed as well; Silicon Valley companies had been selling to other
manufacturing companies. The new companies targeted consumers, a far
different market.

"You sold on specs in the hardware era, you sell on manipulation in the
software era," he said. In "the social networking era, the companies are
thinking about how to enlist you in joining their cult. They use tricks
from casinos and everywhere else. They convince us to design our own
products. After all, what is Facebook but a set of tools to make us into

"As long as the money is here, the Valley will regenerate itself."

As the software and apps piled up, the chips disappeared, hidden away. "The
last time we thought about chips was with the 'Intel Inside'
campaign," he said.

But that has suddenly changed.

Now, Malone said, "it's a dangerous time. Eighty percent of the world's
chips are made in Taiwan, and China has found the choke point of the world
economy—those fabs. There's a scramble to build fabs outside Taiwan, but
that will take two to three years. So it's a very worrisome time right now."

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