Transistor-technology core shaping global trade and power

Unlike a nuclear bomb or jumbo jet, a Transistor is a tiny three-legged device. It’s made from the widely available cheapest material on the earth—sand. But its roles in civilian innovations and military power have been growing, determining winners and losers. It has been the hidden secret behind the rise of the embryonic beginning of products and Startups and the fall of matured products and dominant firms. As this tiny device has been increasingly determining how missiles precisely find the moving target or how automobiles avoid accidents, the capability of making it has become the target of gaining superiority. Surprisingly, the success is in making the Transistor increasingly tinier. As we succeed in making the Transistor smaller, its performance gets better, and the cost falls. Hence, the race has been to find better means to make it smaller and prevent opponents from attaining it.

In addition to products and processes, Transistor’s hidden and mysterious role has been the underlying force of the rise and fall of industries and even nations. Hence, we get bewildered in answering questions like the rise of Japan or Taiwan or the rapid diffusion of smartphones and computers. On the other hand, why could not India develop an industrial economy out of import substitution to attain high prosperity? Similarly, why are we observing an increasing role of electronics and software in all electrical and mechanical products? From the phenomenal rise of smartphone diffusion to the rise of Sony and the fall of Kodak, many questions have made us curious. At the core of the answers to these and many other questions lies a tiny device—the Transistor. It’s small and getting smaller. It is so tiny that a fingernail-sized silicon chip can hold several billions of them.

Growth of the semiconductor industry out of Transistor

Production and trading of transistors and their cousins in the form of integrated circuits (chips) and discrete devices have formed the semiconductor industry. The global trade in this industry has been rising, reaching $600 billion. More importantly, silicon chips determine the Innovation edge inconceivable in all sectors. Its role, from civilian innovations to the military, is so crucial that powerful nations have been after attaining self-sufficiency in producing this tiny device and its cousins. As chip density has been determining innovation edge, whether in smartphones or precision missiles, there has been an urgency to prevent the opponent from accessing the means of producing the smallest Transistor. Such a reality has led to the unfolding of the US-China Chip War.

Although Transistor is getting far more important than oil or iron in the industrial economy of the 20^th century, every country has an abundant supply of essential raw materials. The primary ingredient is silicon; and sand containing it is widely available all across the world. Despite it, there has been a growing monopoly in each layer of the value chain of the Transistor or semiconductor industry. As opposed to having access to the deposit of sand or the invention of the Transistor, the strategy and ideas in making the smallest Transistor have been the underlying factor affecting global trade and military power.

What do Transistors do?

Transistor performs two essential functions—working as a switch and amplifier. Unlike mechanical switch, it does not have any moving components. By applying a small electric voltage, we can turn off and on this switch. This switching function resembles True and False or 1 and 0—underlying logic of the digital world. Hence, we develop building blocks of digital logic circuits like AND and OR gates, leading to microprocessors out of transistors. They form the core of computers, smartphones, and machines running software applications.

The amplifying information-bearing signal is another essential function of the Transistor. Whether ECG or radio signal, we capture all kinds of signals in a faint form. Hence, transistors play a vital role in amplifying them to serve our purposes. We use the transistors’ capability to innovate signal generating, receiving, and processing machines. There have been many examples, from radios, television, and smartphones to RADAR.

We can also use the Transistor to generate, mix and filter signals with the help of passive components like resistors, capacitors, and inductors. Besides, Transistor’s building block diode is used to rectify the oscillating energy supply in creating a unidirectional flow of current. We use this capability to develop energy processing equipment for energy production, distribution, and consumption purposes.

Furthermore, we use transistor properties in creating flip-flop circuits for storing and retrieving data (bits). In addition to volatile electronic memory, we have succeeded in developing permanent storage, NAND flash memory. Quite interestingly, the LED light bulb uses the diode properties of transistors to produce light. Besides, LCDs are also the outcome of Transistors, operating as a switch turning on and off liquid crystals. Over the decades, many variations have been developed to support numerous innovations by leveraging the primary function of amplifications and switching.

How are they formed?

A tiny Transistor has three legs or terminals attached to three sections: (i) base, (ii) emitter, and (iii) collector. We control charge flow from the emitter to the collector by applying a voltage at the base. A slight variation of voltage or current at the base leads to a large change of current in the collector—creating its amplification characteristics. By changing the voltage at the base, we can also turn on and off the flow of charges between the emitter and collector, turning it into a switch.

We form transistors using semiconductor materials like silicon. The semiconductor has a limited number of free charges, like electrons. But by adding impurities, we can change the density of freely movable charges, whether as electrons or holes (free placeholders of electrons), through doping. Hence, we can turn intrinsic (pure) semiconductors into p-type and n-type extrinsic semiconductors (impure) through doping.

If we increase hole density by applying suitable doping materials (like boron or gallium), we call it a p-type extrinsic semiconductor. And we form n-type semiconductors by increasing free electrons through dopants like arsenic or phosphorus. Hence, by adding suitable dopants on two parts of the same piece of semiconductor, we can create a PN junction, forming a diode. By dividing it into three segments and adding suitable dopants, we can create two junctions, making it PNP or NPN transistor. We can form many more junctions through the same process, forming multiple discrete diodes and transistors on the same semiconductor substrate.

Cluster of Transistors and other devices forming integrated circuits

Alongside diodes and transistors, we can also form resistors and capacitors by adding suitable materials through the deposition. We can also connect them through the same process, turning those discrete devices into integrated circuits (IC). As we keep making those devices smaller, bringing them closer, and forming them in multiple vertical layers, we succeed to keep increasing IC or Chip density.

ICs containing 10-100 transistors are called small-scale integrated (SSI) circuits. By making 100-1000 transistors on the same chip, we make medium-scale integrated (MSI) circuits. Our continued success in making transistors increasingly smaller, leading to packaging 100-100,000, up to 1 million, and from millions to billions, results in LSI (large scale), VLSI (very large scale), and ULSI (ultra large scale) circuits.

What are Transistor types?

Depending on how we form transistors and the slight variation of characteristics they show, there are many types. Two common types are (i) bipolar junction transistor (BJT) and (ii) Field Effect transistor (FET). BJT could be NPN and PNP sub-types. Similarly, FET has two sub-types: JFET and MOSFET. FET could be N-channel or P-channel. And MOSFET may have depletion and enhancement mode types; each could also have N-Channel and P-Channel.

The humble birth of the Transistor for finding a better alternative to the electro-mechanical telephone switch

In the early 1940s, AT&T asked its R&D wing Bell Labs to invent a solid-state switch, requiring no moving parts to deal with a failure rate and maintenance burden. This assignment led to the invention of the Transistor in 1947. Subsequently, three inventors, John Bardeen, Walter Brattain, and William Shockley, won the Nobel Prize in 1956.

In the beginning, the potential of the Transistor mostly remained latent. Despite its smaller size than vacuumed tube devices, it is noisy and can handle only small power. Besides, the cost of production was also high. For example, in 1957, Fairchild Semiconductor priced its first batch of transistors at $150 apiece. Hence, from the price and performance perspective, this solid-state device was not suitable for civilian innovations in the beginning. Therefore, Bell Labs decided to license it, so that competition among private firms picks up to unfold its latent potential. Consequentially, in 1952, Bell Labs started licensing Transistor for $25,000. It also started arranging knowledge-sharing sessions. Among the first licensees were General Electric, IBM, Raytheon, Texas Instruments, and a small Japanese company, Tokyo Tsushin Kogyo, that eventually became Sony Electronics.

Transistors’ elusive role in reinvention and innovation—rising embryonic firms and falling dominant giants

Both Bell Labs and license-receiving companies embarked on leveraging Transistor, either for reinventing existing ones or innovating new products. But, due to the embryonic beginning, whatever the things they were targeted to innovate or reinvent, they emerged in primitive form. For example, Sony’s transistor radio was highly inferior to RCA’s one made out of vacuumed tubes. Hence, RCA kept avoiding Sony’s endeavor. But due to the rapid growth of Transistor in improving performance and reducing cost, Transistor radio emerged as a creative destruction force, burning RCA and many other American and European radio receiver makers.

Along with Radio, Sony and other Japanese companies kept pursuing the reinvention of various consumer electronics products by changing the vacuum tube technology core with Transistors. Like the radio, they also emerged in primitive form. Hence, dominant firms making matured products out of vacuum tube devices kept overlooking them. But Japanese companies were aggressive in advancing transistors, driving performance and lowering costs. Consequentially, Japan succeeded in Sony-led globally competitive electronic cluster, raising Japan from the ash of WWII. Unlike Japan, India remained busy making copies of imported products without changing the technology core. Hence, India could not replicate Japan’s success in growing a robust industrial economy.

The amenability of the advancement of the Transistor, giving birth to Moore’s law, also confused IBM, Kodak, and many others in predicting the future of Personal computers, Digital Cameras, Smartphones, and many more. As a result, startups like Microsoft, Intel, Apple, and many others grew as giants. Consequentially, giants like IBM, Kodak, Nokia, and many more suffered from the burn of Disruptive innovation fueled by the unstoppable growth of the Transistor

Rise of Transistor triggering Chip War

As explained, the Transistor showed up in primitive form. Consumer electronics products made out of them in the 1950s were inferior. In the beginning, the use of transistors was limited to reinventing consumer electronics products and computers. But over the decades, its role in the Incremental innovation of many products kept expanding.

Its growing role in incremental performance improvement and reinvention has reached such gravity that access to advanced chips has become a national security issue. Hence, powerful nations like China and India have been after attaining self-sufficiency in semiconductor production. On the other hand, due to specialization, the USA has lost its edge in silicon chip production. Hence, growing dependence on supply from Asia for high-end chips has become USA’s security concern. Therefore, the USA-led western countries have come up with subsidies to regain the silicon edge. Furthermore, the USA has been after regulations preventing China from accessing technology for producing high-end chips. Consequentially, a series of measures have triggered the Chip War.

Import substitution is ineffective due to the growing progression

The global trade of semiconductors reaching $600 billion in 2022 is expected to touch $1 trillion in 2030. Due to being a global factory and assembling plant of electronics products, China’s semiconductor imports reached $350 billion in 2020. On the other hand, due to the local assembling strategy, semiconductor in all significant countries has been rapidly growing. For example, India’s semiconductor import is expected to grow 20 billion in 2020 to reach $63 billion by 2026. Hence, China, India, and a few other countries are after entering, expanding, and upgrading semiconductor production. But as Transistor design and fabrication technologies have been rapidly advancing, the conventional import substitution strategy has weak efficacy. Besides, growing capital expenditure, reaching $20 billion for the latest node, has been demanding increasing Economies of Scale. Hence, attaining self-sufficiency through the capacity to replicate does not appear appropriate.

Rise of Japan and Taiwan due to Transistor

The uprising of Japan from WWII devastation is a development miracle. Similarly, the graduation of Taiwan from a low-income country to the status of high-income is also intriguing. On the other hand, Australia, Canada, and a few other natural and human capital-rich countries have been struggling to find sustained growth paths. Besides, despite having the capability of replicating a growing number of products, India, Brazil, and a few other nations could not reach high-income status. One of the underlying reasons for such an intriguing contrast has been the capability of advancing transistors and outperforming competitors, including inventors, in incremental innovation and reinvention. For example, Sony bankrupted RCA, Kodak, and a few other influential companies, and Toshiba took over the data storage business from IBM. Similarly, TSMC has emerged as a global silicon leader by pushing Intel to suffer from losses.

In retrospect, Transistor has been at the core of transforming products and industries, rising and falling of firms, shaping global trade and power, and uprising nations. In addition to its growing performance fueling incremental advancement and reinvention, its unfolding latent potential keeps challenging decision-making. Consequentially, influential firms make mistakes, allowing new entrants to grow and unleash disruptive innovation effects on them. Besides, due to endlessly unfolding latent potential, countries like Japan and Taiwan became high-income countries by producing ideas out of the advancement of transistors and their usages. Transistor has been at the root of the graduation of Taiwan from idea importer to exporter. Furthermore, as the Transistor edge has been determining the trade and military might, attaining and retaining supremacy in Transistor has triggered the US-China trade war.

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Transistor–technology core shaping global trade and power

Unfolding latent potential as decreasing size leading to growing chip density has been making Transistor increasingly influential affecting global trade and power