I recently read a book titled “The Microchip Revolution: A Brief History” authored by Luc Oliver Bauer & E. Marshall Wilder. It has lots of interesting technical details as well as personal anecdotes. A wonderful read.

I flipped to the chapter on Intel once I got my hands on the book, because it was the company that I am most familiar with. The chapter gave me a fuller understanding of how intricate and complex the whole manufacturing process was. It also gave the reader a fascinating story on how engineers came up clever ideas and solutions to various problems.

The authors also recounts various aspects of the Silicon Valley culture, which I found amusing and illuminating at the same time. For example, when talk about how technical know-how was spread, they wrote (page 160):

“Espionage in Silicon Valley was common. Engineers pretty much knew each other and frequented the same Silicon Valley watering holes. The most famous was Walker’s Wagon Wheel, but Ricky’s Hyatt House and The Round House in Cupertino were also used for ‘technical exchanges’.”

Well, I now know where I will be going the next time I go to the west coast… Joking aside, it does point out one important aspect of industry success, and that is the clustering effect. It seems that you need a critical mass of like-minded people working in the same field but in different companies, clustering in a small geographical region. Ideas and information get spread, and competition pushes each other forward.

This cluster effect is also explaining why TSMC is having its success in Taiwan. TSMC is part of the Taiwan Hi-tech Science Parks, an ecosystem that breeds and support innovation and competence. Today, Taiwan has semiconductor design firms, equipment supplier, wafer supplier, gas supplier, as well as test and assemblers. All the world’s major semiconductor players such as ASML, AMAT, and LAM all have R&D centers as well as training and service facilities in Taiwan. Today the advantage of the entire ecosystem is formidable.

Here is what the founder of TSMC said about Intel and the strength of Taiwan (not a very good video, as it is too brief):

Will it replace or overtake the Silicon Valley at the center of innovation of the world? It is a fascinating question to ponder, something I will discuss in a later post.