EE 292P: Atoms, Bits (Mar 3)

Attendees: Dustin J Ross Date: March 3, 2026 Type: Class Session

Summary

Course Context & Guest Introduction

• EE 292P: Atoms, Bits, and National Interest class session
• Guest speaker: Ike Flyman, Hoover Institute fellow
  • Author of upcoming book “Defending Pilot” (April release)
  • Previously at Harvard, Columbia, Oxford
  • Expert on great power competition and energy policy
• Course building toward geopolitics → strategy sessions
• Next week: Professor Ragerman on TSMC management

Taiwan’s Strategic Importance Beyond Semiconductors

• Democracy of 23 million, rated freer than US/UK/France/Japan
• Semiconductor dominance: 90% advanced chips, 99% Nvidia GPUs
  • Global economy would drop ~5% GDP if access lost
  • NASDAQ would collapse due to AI dependency
• Geographic chokepoint in first/second island chains
  • Controls key naval straits (Nianca Strait, Basi Channel)
  • Prevents China’s navy from reaching open Pacific waters
• Economic leverage over entire Asian supply chain

China’s Grand Strategy & Xi Jinping’s Approach

• Goal: Hegemonic power across Asia, eventually globally
• Strategy: Control economic order without direct invasion
• Training facility in Inner Mongolia
  • Perfect replica of Taiwan’s presidential building
  • Special forces practice decapitation attacks
• Incremental approach preferred over shock invasion
  • Push escalation burden onto US

Quarantine Scenario (Most Likely Chinese Strategy)

• Not full blockade - legal/customs enforcement action
• Chinese Coast Guard intercepts ships claiming contraband searches
• Forces vessels to clear customs on mainland
• Pushes escalation decision to US President
• Gets Taiwan’s fabs intact while avoiding first strike
• Maritime militia (fishing fleet) can physically block traffic

Military Technology Revolution

• Drone warfare changing asymmetric balance
• Taiwan 90 miles from mainland
• Defensive “porcupine” strategy potential
  • 10,000 drones vs expensive F-35s
  • Underground tunnel systems
  • Cost-effective against invasion fleet

Semiconductor Manufacturing Reality Check

• TSMC: 6 twelve-inch fabs, 8 eight-inch fabs
• Key bottleneck: Process knowledge in engineers’ heads
• Yield rates critical - TSMC far superior to Chinese fabs
• Arizona fab struggles with US work culture mismatch
• 80% of electrical engineering PhDs are non-US citizens
• Only 3 cutting-edge options globally: TSMC, Samsung, Intel

US Industrial Policy & Defense Challenges

• First real industrial policy in 75 years (CHIPS Act)
• Submarine production crisis: 1.2/year built, 1.5/year retired
• 120,000 technical expert shortage in submarine manufacturing