Read down to the trivia answer
The Roaring Chips
As we outline in the news today, Nvidia’s stock has soared in 2023, largely thanks to how critical its products are in empowering ChatGPT and other services from healthcare to cloud to computer hardware.
Today, Nvidia is one of the most valuable companies in the world, with a market capitalization greater than Berkshire Hathaway, Meta, and Tesla.
After its earnings beat Wednesday, CEO and co-founder Jensen Huang said the company had seen “surging demand” for its data center products because their “chips” work seamlessly with AI.
In more scientific terms, a “chip” or semiconductor is defined as a substance that has a conductivity between an insulator and that of most metals, either due to the addition of any impurity or because of temperature effects.
Devices made of semiconductors, notably silicon, are essential components of most electronic circuits.
In simple terms, a semiconductor is a material that controls a flow of electricity.
It’s difficult to think of an aspect of our lives that doesn’t involve semiconductors. The device you’re using right now, the fridge in your kitchen, and the smart TV you might binge shows on are all made possible by finely etched bits of silicon.
It’s the most manufactured item in human history. But how did it come to be?
A New Jersey lab
The transistor, a miniature semiconductor, was born in New Jersey in December 1947, after World War II.
Three physicists at Bell Laboratories in Murray Hill, N.J., built the world’s first transistor.
William Shockley, John Bardeen, and William Brattain had been looking for a semiconductor amplifier to replace the vacuum tubes that made radios and other electronics so bulky, hot, and energy-requiring.
Once they made their lab discovery, they didn’t speak of it to anyone for six months. They wanted to experiment further and apply for patents before word got out.
On June 30, 1948, they held a press conference in New York City, showing off a transistor model and a TV and radio with transistors in place of the tubes.
Nobody was talking about computers, but it was a first look at the future. The immediate response? The New York Times mentioned it at the bottom of its "News of Radio" column on page 46.
A Bell Labs engineer said then, "The transistor in 1949 didn't seem like anything very revolutionary to me. It just seemed like another one of those crummy jobs that required one hell of a lot of overtime and a lot of guff from my wife."
Gradual improvement
Only 20% of the transistors worked and were hard to manufacture. But the technology kept improving.
It got its first consumer application in December 1952 in a hearing aid, where it replaced one of three tubes and lowered battery costs. By 1954 the transistor was in 97% of hearing aids, and sales of the devices were up 50%. That year the first transistor radio came out.
Then, in 1959, Texas Instruments’ Jack Kilby and Fairchild Semiconductor’s Robert Noyce combined a sequence of transistors on a single wafer of a silicon crystal.
This enabled mass production, laying the groundwork for the microprocessor, the computer on a chip, to form in the 1960s. Intel brought it to market in 1971, just before tech giants like Apple and Microsoft were founded to spark a revolution.
The brain
Now, investors realize microchips are the lifeblood of the modern economy, particularly an AI-driven economy.
Nvidia, for example, is the S&P 500’s top performer in 2023:
Last year, lawmakers passed the 2022 CHIPS Act to remake the U.S. into a semiconductor powerhouse, partly to reduce America’s reliance on foreign nations for these tiny chips that power everything from dishwashers to computers to cars.
The law included $39 billion to fund the construction of new and expanded semiconductor facilities. Some chips feature more than 50 billion tiny transistors that are 10,000 times smaller than the width of a human hair.
Tiny but powerful. More important, functional and critical to our modern world. That’s unlikely to change.
“People usually compare the computer to the head of the human being,” said Masayoshi Son, a Japanese billionaire technology entrepreneur. “I would say that hardware is the bone of the head, the skull. The semiconductor is the brain within the head. The software is the wisdom. And data is the knowledge.”
Dive deeper
For more on chips, check out the 2022 bestseller Chip War: The Fight for the World’s Most Critical Technology.
TRIVIA ANSWER
In 2021, almost 1.14 trillion chips were sold globally. That’s about 140 chips for every person on the planet, or 130 million per hour.
AI
