China now spends more money each year importing chips than it spends on oil.

The USSR’s “copy it” strategy had actually benefitted the United States, guaranteeing the Soviets faced a continued technological lag. In 1985, the CIA conducted a study of Soviet microprocessors and found that the USSR produced replicas of Intel and Motorola chips like clockwork. They were always half a decade behind.

One leading Chinese expert in optics who was sent to the countryside survived rural reeducation on a diet of rough grains, boiled cabbage, and an occasional grilled snake, as he waited for Mao’s radicalism to subside.

A fixation on hitting short-term margin targets began to replace long-term technology leadership. The shift in power from engineers to managers accelerated this process. Otellini, Intel’s CEO from 2005 to 2013, admitted he turned down the contract to build iPhone chips because he worried about the financial implications. A fixation on profit margins seeped deep into the firm—it’s hiring decisions, its product road maps, and its R&D processes. The company’s leaders were simply more focused on engineering the company’s balance sheet than its transistors.

“Real men have fabs.”

It took Trumpf a decade to master these challenges and produce lasers with sufficient power and reliability. Each one required exactly 457,329 component parts.

Today even designing a leading-edge chip—which can cost several hundred million dollars—is too expensive for all but the most important projects.

After Jinhua paid invoices to the U.S. firms that supplied its crucial chipmaking tools, the U.S. banned their export. Within months, production at Jinhua ground to a halt. China’s most advanced DRAM firm was destroyed.