Semiconductors are extraordinarily important
In the fictional world of Dune, “the spice” is the fundamental block of commerce and technological development in the known universe. In our real world, the closest thing we have to the spice is semiconductors.1
This view is one of only a few that Washington, Wall St, and Silicon Valley all share today.
Washington, D.C. — The CHIPS and Science Act (2022), a Biden administration bill that passed with unusually strong bipartisan support, will provide ~$280 billion in grants and subsidies to fund domestic semiconductor research and manufacturing.
Wall St. — The semiconductor industry is forecasted to surpass 1 trillion USD in annual revenues by 2030 (from ~$500B today).2 It’s also one of the most value accretive technologies that companies work on: Of the 10 most valuable companies in the world right now, there are 3 who semiconductor companies (NVIDIA, TSMC, and Broadcom) and 6 more who design custom chips as a significant part of their product strategy (Apple, Microsoft, Amazon, Alphabet, Meta, and Tesla).3
Silicon Valley — The race for AI is on. With the scaling laws of AI models, the key players understand that the primary moat will be access to compute (i.e. chips). This is supported by both meme headlines (“Sam Altman in talks to raise $7T to build new chip fabs!”) and my on-the-ground vibe check of what my peers are paying attention to.
Beyond these power circles, I see evidence that this message has seeped into the mainstream more recently. The popularity of books like Chris Miller’s Chip War suggests general interest. In the most recent Tim Ferriss podcast—a good proxy for what’s top-of-mind for the Average Smart Person™️—includes a half-hour discussion on semiconductors and the geopolitical significance of Taiwan. From the Davos elite pontificating on the new world order to the suburban mom wondering why it’s taking so long for her new car to be delivered, the entire world is waking up to our collective need for more and better chips.
Although we all agree that chips are important, what I feel is missing is a sense of agency that smart, young people can make a meaningful contribution here, even if they’re industry outsiders. Instead, there’s a default resignation to the incumbents. Engineering and entrepreneurial talent is not flocking to semiconductors in numbers commensurate with its importance.4
I believe we can (and will) change this.
From now on, I’ll use the term “semiconductor” interchangeably with “silicon”, “integrated circuit (IC)”, and “chip”.↩
The only one in the global top 10 not directly involved in the design & manufacturing of chips is Saudi Aramco. Their main product (oil) can be thought of as the chips of the 20th century. Notably, it’s also the oldest company in that group and one of only two not founded on the West Coast of the United States (the other being TSMC).↩
America Faces Significant Shortage of Tech Workers in Semiconductor Industry and Throughout U.S. Economy (2023)↩