Why Making Computer Chips Has Become Such a Big Deal

Computer chips are the engine room of the digital economy, and their growing capabilities are enabling technologies such as generative artificial intelligence that promise to transform multiple industries. Their critical role was highlighted when the coronavirus pandemic disrupted chip production in Asia, tipping global technology supply chains into chaos. Small wonder, then, that the devices are now the focus of intense competition between the world’s economic superpowers.

They’re what’s needed to process and understand the mountains of data that have come to rival oil as the lifeblood of the economy. Made from materials deposited on disks of silicon, chips — shorthand for semiconductors, or integrated circuits — can perform a variety of functions. Memory chips, which store data, are relatively simple and are traded like commodities. Logic chips, which run programs and act as the brains of a device, are more complex and expensive. Access to components such as Nvidia Corp.’s H100 AI accelerator has become linked to both national security and the fortunes of giant companies such as Alphabet Inc.’s Google and Microsoft Corp. as they race to build out giant data centers and steal the lead in what’s seen as the future of computing. But even every-day devices are increasingly reliant on chips. Every press of a button in a car full of gadgetry requires simple chips to translate that touch into electronic signals. And all battery-powered devices need chips to convert and regulate the flow of electricity.