The Semiconductor Ecosystem – Explained

Posted on January 25, 2022 by steve blank

The last year has seen a ton written about the semiconductor industry: chip shortages, the CHIPS Act, our dependence on Taiwan and TSMC, China, etc.

But despite all this talk about chips and semiconductors, few understand how the industry is structured. I’ve found the best way to understand something complicated is to diagram it out, step by step. So here’s a quick pictorial tutorial on how the industry works.

The Semiconductor Ecosystem

We’re seeing the digital transformation of everything. Semiconductors – chips that process digital information — are in almost everything: computers, cars, home appliances, medical equipment, etc. Semiconductor companies will sell $600 billion worth of chips this year.

Looking at the figure below, the industry seems pretty simple. Companies in the semiconductor ecosystem make chips (the triangle on the left) and sell them to companies and government agencies (on the right). Those companies and government agencies then design the chips into systems and devices (e.g. iPhones, PCs, airplanes, cloud computing, etc.), and sell them to consumers, businesses, and governments. The revenue of products that contain chips is worth tens of trillions of dollars.

Yet, given how large it is, the industry remains a mystery to most.  If you do think of the semiconductor industry at all, you may picture workers in bunny suits in a fab clean room (the chip factory) holding a 12” wafer. Yet it is a business that manipulates materials an atom at a time and its factories cost 10s of billions of dollars to build.  (By the way, that wafer has two trillion transistors on it.)

If you were able to look inside the simple triangle representing the semiconductor industry, instead of a single company making chips, you would find an industry with hundreds of companies, all dependent on each other. Taken as a whole it’s pretty overwhelming, so let’s describe one part of the ecosystem at a time.  (Warning –  this is a simplified view of a very complex industry.)

Semiconductor Industry Segments

The semiconductor industry has seven different types of companies. Each of these distinct industry segments feeds its resources up the value chain to the next until finally a chip factory (a “Fab”) has all the designs, equipment, and materials necessary to manufacture a chip. Taken from the bottom up these semiconductor industry segments are:

  1. Chip Intellectual Property (IP) Cores
  2. Electronic Design Automation (EDA) Tools
  3. Specialized Materials
  4. Wafer Fab Equipment (WFE)
  5. “Fabless” Chip Companies
  6. Integrated Device Manufacturers (IDMs)
  7. Chip Foundries
  8. Outsourced Semiconductor Assembly and Test (OSAT)

The following sections below provide more detail about each of these eight semiconductor industry segments.

Chip Intellectual Property (IP) Cores

  • The design of a chip may be owned by a single company, or…
  • Some companies license their chip designs – as software building blocks, called IP Cores – for wide use
  • There are over 150 companies that sell chip IP Cores
  • For example, Apple licenses IP Cores from ARM as a building block of their microprocessors in their iPhones and Computers

Electronic Design Automation (EDA) Tools

  • Engineers design chips (adding their own designs on top of any IP cores they’ve bought) using specialized Electronic Design Automation (EDA) software
  • The industry is dominated by three U.S. vendors – Cadence, Mentor (now part of Siemens) and Synopsys
  • It takes a large engineering team using these EDA tools 2-3 years to design a complex logic chip like a microprocessor used inside a phone, computer or server. (See the figure of the design process below.)

  • Today, as logic chips continue to become more complex, all Electronic Design Automation companies are beginning to insert Artificial Intelligence aids to automate and speed up the process

Specialized Materials and Chemicals

So far our chip is still in software. But to turn it into something tangible we’re going to have to physically produce it in a chip factory called a “fab.” The factories that make chips need to buy specialized materials and chemicals:

  • Silicon wafers – and to make those they need crystal growing furnaces
  • Over 100 Gases are used – bulk gases (oxygen, nitrogen, carbon dioxide, hydrogen, argon, helium), and other exotic/toxic gases (fluorine, nitrogen trifluoride, arsine, phosphine, boron trifluoride, diborane, silane, and the list goes on…)
  • Fluids (photoresists, top coats, CMP slurries)
  • Photomasks
  • Wafer handling equipment, dicing
  • RF Generators


Wafer Fab Equipment (WFE) Make the Chips

  • These machines physically manufacture the chips
  • Five companies dominate the industry – Applied Materials, KLA, LAM, Tokyo Electron and ASML
  • These are some of the most complicated (and expensive) machines on Earth. They take a slice of an ingot of silicon and manipulate its atoms on and below its surface
  • We’ll explain how these machines are used a bit later on

 “Fabless” Chip Companies

  • Systems companies (Apple, Qualcomm, Nvidia, Amazon, Facebook, etc.) that previously used off-the-shelf chips now design their own chips.
  • They create chip designs (using IP Cores and their own designs) and send the designs to “foundries” that have “fabs” that manufacture them
  • They may use the chips exclusively in their own devices e.g. Apple, Google, Amazon ….
  • Or they may sell the chips to everyone e.g. AMD, Nvidia, Qualcomm, Broadcom…
  • They do not own Wafer Fab Equipment or use specialized materials or chemicals
  • They do use Chip IP and Electronic Design Software to design the chips


Integrated Device Manufacturers (IDMs)

  • Integrated Device Manufacturers (IDMs) design, manufacture (in their own fabs), and sell their own chips
    • They do not make chips for other companies (this is changing rapidly – see here.)
    • There are three categories of IDMs– Memory (e.g. Micron, SK Hynix), Logic (e.g. Intel), Analog (TI, Analog Devices)
  • They have their own “fabs” but may also use foundries
    • They use Chip IP and Electronic Design Software to design their chips
    • They buy Wafer Fab Equipment and use specialized materials and chemicals
  • The average cost of taping out a new leading-edge chip (3nm) is now $500 million

 Chip Foundries

  • Foundries make chips for others in their “fabs”
  • They buy and integrate equipment from a variety of manufacturers
    • Wafer Fab Equipment and specialized materials and chemicals
  • They design unique processes using this equipment to make the chips
  • But they don’t design chips
  • TSMC in Taiwan is the leader in logic, Samsung is second
  • Other fabs specialize in making chips for analog, power, rf, displays, secure military, etc.
  • It costs $20 billon to build a new generation chip (3nm) fabrication plant

Fabs

  • Fabs are short for fabrication plants – the factory that makes chips
  • Integrated Device Manufacturers (IDMs) and Foundries both have fabs. The only difference is whether they make chips for others to use or sell or make them for themselves to sell.
  • Think of a Fab as analogous to a book printing plant (see figure below)
  1. Just as an author writes a book using a word processor, an engineer designs a chip using electronic design automation tools
  2. An author contracts with a publisher who specializes in their genre and then sends the text to a printing plant. An engineer selects a fab appropriate for their type of chip (memory, logic, RF, analog)
  3. The printing plant buys paper and ink. A fab buys raw materials; silicon, chemicals, gases
  4. The printing plant buys printing machinery, presses, binders, trimmers. The fab buys wafer fab equipment, etchers, deposition, lithography, testers, packaging
  5. The printing process for a book uses offset lithography, filming, stripping, blueprints, plate making, binding and trimming. Chips are manufactured in a complicated process manipulating atoms using etchers, deposition, lithography. Think of it as an atomic level offset printing. The wafers are then cut up and the chips are packaged
  6. The plant turns out millions of copies of the same book. The plant turns out millions of copies of the same chip

While this sounds simple, it’s not. Chips are probably the most complicated products ever manufactured.  The diagram below is a simplified version of the 1000+ steps it takes to make a chip.

Outsourced Semiconductor Assembly and Test (OSAT)

  • Companies that package and test chips made by foundries and IDMs
  • OSAT companies take the wafer made by foundries, dice (cut) them up into individual chips, test them and then package them and ship them to the customer

 

Fab Issues

  • As chips have become denser (with trillions of transistors on a single wafer) the cost of building fabs have skyrocketed – now >$10 billion for one chip factory
  • One reason is that the cost of the equipment needed to make the chips has skyrocketed
    • Just one advanced lithography machine from ASML, a Dutch company, costs $150 million
    • There are ~500+ machines in a fab (not all as expensive as ASML)
    • The fab building is incredibly complex. The clean room where the chips are made is just the tip of the iceberg of a complex set of plumbing feeding gases, power, liquids all at the right time and temperature into the wafer fab equipment
  • The multi-billion-dollar cost of staying at the leading edge has meant most companies have dropped out. In 2001 there were 17 companies making the most advanced chips.  Today there are only two – Samsung in Korea and TSMC in Taiwan.
    • Given that China believes Taiwan is a province of China this could be problematic for the West.

What’s Next – Technology

It’s getting much harder to build chips that are denser, faster, and use less power, so what’s next?

  • Instead of making a single processor do all the work, logic chip designers have put multiple specialized processors inside of a chip
  • Memory chips are now made denser by stacking them 100+ layers high
  • As chips are getting more complex to design, which means larger design teams, and longer time to market, Electronic Design Automation companies are embedding artificial intelligence to automate parts of the design process
  • Wafer equipment manufacturers are designing new equipment to help fabs make chips with lower power, better performance, optimum area-to-cost, and faster time to market

What’s Next – Business

The business model of Integrated Device Manufacturers (IDMs) like Intel is rapidly changing. In the past there was a huge competitive advantage in being vertically integrated i.e. having your own design tools and fabs. Today, it’s a disadvantage.

  • Foundries have economies of scale and standardization. Rather than having to invent it all themselves, they can utilize the entire stack of innovation in the ecosystem. And just focus on manufacturing
  • AMD has proven that it’s possible to shift from an IDM to a fabless foundry model. Intel is trying. They are going to use TSMC as a foundry for their own chips as well as set up their own foundry

What’s Next – Geopolitics

Controlling advanced chip manufacturing in the 21st century may well prove to be like controlling the oil supply in the 20th. The country that controls this manufacturing can throttle the military and economic power of others.

  • Ensuring a steady supply of chips has become a national priority. (China’s largest import by $’s are semiconductors – larger than oil)
  • Today, both the U.S. and China are rapidly trying to decouple their semiconductor ecosystems from each other; China is pouring $100+ billion of government incentives in building Chinese fabs, while simultaneously trying to create indigenous supplies of wafer fab equipment and electronic design automation software
  • Over the last few decades the U.S. moved most of its fabs to Asia. Today we are incentivizing bringing fabs and chip production back to the U.S.

An industry that previously was only of interest to technologists is now one of the largest pieces in great power competition.

Filed under: Gordian Knot Center for National Security Innovation, Technology | 22 Comments »

Save the Date! the 5th Lean Innovation Educators Summit

Posted on January 19, 2022 by steve blank

SAVE THE DATE for the 5th Lean Innovation Educators Summit on The Role of Educators and the University in Building Sustainable and Innovative Ecosystems 
February 3rd, 2022 from 1 to 4pm EST, 10 to 1pm PST 

Join me, Jerry Engel, Pete Newell, and Steve Weinstein as well as educators from universities around the world for this upcoming event.  

The Summit brings together leading entrepreneurship educators who are putting Lean Innovation to work in their classrooms, accelerators, and students’ ventures. This is the fifth edition of this semi-annual gathering, a supportive peer community of educators, and we’ll meet to discuss how we adapt to meet the challenges of the current tumultuous environment. The upcoming session will focus on the role of the university, and other important organizations in our ecosystems, in supporting our critical mission of preparing the next generation of entrepreneurs and innovators. 

Why?
The role of entrepreneurs and the ecosystem that supports them is even more important as the pace of change accelerates. The challenges of the pandemic and global warming highlight the importance of capturing value from technology and the innovators who create novel and effective solutions.  How do we as entrepreneurship and innovation educators best prepare the next generation?  What is the role of the university in helping us do this?

What?
Our key note speaker is Dr. Richard Lyons of UC Berkeley – the University’s first ever Chief Innovation Officer. After ten years as Dean of the Berkeley Haas School of Business, Rich brings a fresh and broad perspective. Stimulated by Professor Lyon’s keynote, we’ll get to the heart of the Summit, our peer to peer discussions. In these moderated sessions we’ll discuss best practices with colleagues from around the world. We’ll then share the results of the breakout sessions with everyone.

How?
This session is free but limited to Innovation educators. You can register for the event here and learn more on our website:  https://www.commonmission.us/summit. We look forward to gathering as a community to continue shaping the future of Lean Innovation Education.

Panelists and moderators include:  

Ivy Schultz – Columbia University
Victoria Larke – University of Toronto
Ali Hawks – BMNT
Julie Collins – Georgia Tech
Babu DasGupta – University of Wisconsin – Milwaukee
Bob Dorf – Columbia University
Michael Marasco – Northwestern University
Sabra Horne – BMNT
Phil Weilerstein – Venture Well
Tyrome Smith – Common Mission Project
Thomas O’Neal – University of Central Florida
Paul Fox – La Salle University
Philip Bouchard – TrustedPeer Entrepreneurship
Jim Hornthal – UC Berkeley
Todd Morrill – UC Berkeley
Todd Basche – BMNT
Dave Chapman – University College London
Stephanie Marrus – University of California – San Francisco
Sid Saleh – Colorado School of Mines
Joe Smith – Department of Defense
Jim Chung – George Washington University

When?

See you February 3rd, 2022 from 1 to 4pm EST, 10 to 1pm PST.
Register here

Filed under: Customer Development | 1 Comment »

What’s Plan B? – The Small, the Agile, and the Many

Posted on January 18, 2022 by steve blank

This post previously appeared in the Proceedings of the Naval Institute.

One of the most audacious and bold manifestos for the future of Naval innovation has just been posted by the Rear Admiral who heads up the Office of Naval Research. It may be the hedge we need to deter China in the South China Sea.

While You Were Out
In the two decades since 9/11, while the U.S. was fighting Al-Qaeda and ISIS, China built new weapons and developed new operational concepts to negate U.S. military strengths. They’ve built ICBMs with conventional warheads to hit our aircraft carriers. They converted reefs in international waters into airbases, creating unsinkable aircraft carriers that extend the range of their aircraft and are armed with surface to air missiles make it dangerous to approach China’s mainland and Taiwan.

To evade our own fleet air defense systems, they’ve armed their missiles with maneuvering warheads, and to reduce our reaction time they have missiles that travel at hypersonic speed.

The sum of these Chinese offset strategies means that in the South China Sea the U.S. can no longer deter a war because we can longer guarantee we can win one.

This does not bode well for our treaty allies, Japan, the Philippines, and South Korea. Control of the South China Sea would allow China to control fishing operations and oil and gas exploration; to politically coerce other countries bordering in the region; to enforce an air defense identification zone (ADIZ) over the South China Sea; or to enforce a blockade around Taiwan or invade it.

What To Do About It?
Today the Navy has aircraft carriers, submarines, surface combatants, aircraft, and sensors under the sea and in space. Our plan to counter to China can be summed up as, more of the same but better and more tightly integrated.

This might be the right strategy. However, what if we’re wrong? What if our assumptions about the survivability of these naval platforms and the ability of our marines to operate, were based on incorrect assumption about our investments in material, operational concepts and mental models?

If so, it might be prudent for the Navy to have a hedge strategy. Think of a hedge as a “just in case” strategy. It turns out the Navy had one in WWII. And it won the war in the Pacific.

War Plan Orange
In the 1930s U.S. war planners thought about a future war with Japan. The result was “War Plan Orange” centered on the idea that ultimately, American battleships would engage the Japanese fleet in a gunnery battle, which the U.S. would win.

Unfortunately for us Japan didn’t adhere to our war plan. They were bolder and more imaginative than we were. Instead of battleships, they used aircraft carriers to attack us. The U.S. woke up on Dec. 7, 1941, with most of our battleships sitting on the bottom of Pearl Harbor. The core precept of War Plan Orange went to the bottom with it.

But the portfolio of options available to Admiral Nimitz and President Roosevelt were not limited to battleships. They had a hedge strategy in place in case the battleships were not the solution. The hedges? Aircraft carriers and submarines.

While the U.S. Navy’s primary investment pre-WW2 was in battleships, the Navy had also made a substantial alternative investment – in aircraft carriers and submarines. The Navy launched the first aircraft carrier in 1920. For the next two decades they ran fleet exercises with them. At the beginning of the war the U.S. Navy had seven aircraft carriers (CVs) and one aircraft escort vessel (AVG). By the end of the war the U.S. had built 111 carriers. (24 fleet carriers, 9 light carriers and 78 escort carriers.) 12 were sunk.

As it turned out, it was carriers, subs, and the Marines who won the Pacific conflict.

Our Current Plan
Fast forward to today. For the last 80 years the carriers in a Carrier Strike Group and submarines remain the preeminent formation for U.S. naval warfare.

China has been watching us operate and fight in this formation for decades. But what if carrier strike groups can no longer win a fight? What if the U.S. is underestimating China’s capabilities, intents, imagination, and operating concepts? What if they can disable or destroy our strike groups (via cyber, conventionally armed ICBMs, cruise missiles, hypersonics, drones, submarines, etc.)? If that’s a possibility, then what is the Navy’s 21st-century hedge? What is its Plan B?

Says Who?
Here’s where this conversation gets interesting. While I have an opinion, think tanks have an opinion, and civilians in the Pentagon have an opinion, RAdm Lorin Selby, the Chief of the Office of Naval Research (ONR), has more than just “an opinion.” ONR is the Navy’s science and technology systems command. Its job is to see over the horizon and think about what’s possible. Selby was previously deputy commander of the Naval Sea Systems Command (NAVSEA) and commander of the Naval Surface Warfare Centers (NSWC). As the chief engineer of the Navy, he was the master of engineering the large and the complex.

What follows is my paraphrasing RADM Selby’s thinking about a hedge strategy the Navy needs and how they should get there.

Diversification
A hedge strategy is built on the premise that you invest in different things, not more or better versions of the same.

If you look at the Navy force structure today and its plan for the next decade, at first glance you might say they have a diversified portfolio and a plan for more. The Navy has aircraft carriers, submarines, surface combatants, and many types of aircraft. And they plan for a distributed fleet architecture, including 321 to 372 manned ships and 77 to 140 large, unmanned vehicles.

But there is an equally accurate statement that this is not a diversified portfolio because all these assets share many of the same characteristics:

  • They are all large compared to their predecessors
  • They are all expensive – to the point where the Navy can’t afford the number of platforms our force structure assessments suggest they need
  • They are all multi-mission and therefore complex
  • The system-to-system interactions to create these complex integrations drive up cost and manufacturing lead times
  • Long manufacturing lead times mean they have no surge capacity
  • They are acquired on a requirements model that lags operational identification of need by years…sometimes decades when you fold in the construction span times for some of these complex capabilities like carriers or submarines
  • They are difficult to modernize – The ability to update the systems aboard these platforms, even the software systems, still takes years to accomplish

If the primary asset of the U.S. fleet now and in the future is the large and the complex, then surely there must be a hedge, a Plan B somewhere? (Like the pre-WW2 aircraft carriers.)  In fact, there isn’t. The Navy has demos of alternatives, but there is no force structure built on a different set of principles that would complicate China’s plans and create doubt in our adversaries of whether they could prevail in a conflict.

The Hedge Strategy – Create “the small, the agile, and the many”
In a world where the large and the complex are either too expensive to generate en masse or potentially too vulnerable to put at risk, “the small, the agile, and the many” has the potential to define the future of Navy formations.

We need formations composed of dozens, hundreds, or even thousands of unmanned vehicles above, below, and on the ocean surface. We need to build collaborating, autonomous formations…NOT a collection of platforms.

This novel formation is going to be highly dependent on artificial intelligence and new software that enables cross-platform collaboration and human machine teaming.

To do this we need a different world view. One that is no longer tied to large 20th-century industrial systems, but to a 21st-century software-centric agile world.

The Selby Manifesto:

  • Digitally adept naval forces will outcompete forces organized around principle of industrial optimization. “Data is the new oil and software is the new steel”
  • The systems engineering process we have built over the last 150 years is not optimal for software-based systems.
    • Instead, iterative design approaches dominate software design
  • The Navy has world-class engineering and acquisition processes to deal with hardware
    • but applying the same process and principles to digital systems is a mistake
  • The design principles that drive software companies are fundamentally different than those that drive industrial organizations.
  • Applying industrial-era principles to digital era technologies is a recipe for failure
  • The Navy has access to amazing capabilities that already exist. And part of our challenge will be to integrate those capabilities together in novel ways that allow new modes of operation and more effectiveness against operational priorities
  • There’s an absolute need to foster a collaborative partnership with academia and businesses – big businesses, small businesses, and startups
  • This has serious implication of how the Navy and Marine Corps needs to change. What do we need to change when it comes to engineering and operating concepts?

How To Get “The Small, The Agile, and The Many” Tested and In The Water?
Today, “the small, the agile and the many” have been run in war games, exercises, simulations, and small demonstrations, but not built at scale in a formation of dozens, hundreds, or even thousands of unmanned vehicles above, below and on the ocean’s surface. We need to prove whether these systems can fight alongside our existing assets (or independently if required).

ONR plans to rapidly prove that this idea works, and that the Navy can build it. Or they will disprove the theory. Either way the Navy needs to know quickly whether they have a hedge. Time is not on our side in the South China Sea.

ONR’s plan is to move boldly. They’re building this new “small, the agile, and the many”formation on digital principles and they’re training a new class of program managers – digital leaders – to guide the journey through the complex software and data.

They are going to partner with industry using rapid, simple, and accountable acquisition processes, using it to get through the gauntlet of discussions to contract in short time periods so we can get to work. And these processes are going to excite new partners and allies.

They’re going to use all the ideas already on the shelves, whether government shelves or commercial shelves, and focus on what can be integrated and then what must be invented.

All the while they’ve been talking to commanders in fleets around the world. And taking a page from digital engineering practices, instead of generating a list of requirements, they’re building to the operational need by asking “what is the real problem?” They are actively listening, using Lean and design thinking to hear and understand the problems, to build a minimal viable product – a prototype solution – and get it into the water. Then asking, did that solve the problem…no? Why not? Okay, we are going to go fix it and come back in a few months, not years.

The goal is to demonstrate this novel naval formation virtually, digitally, and then physically with feedback from in water experiments. Ultimately the goal is getting agile prototyping out to sea and doing it faster than ever before.

In the end the goal is to effectively evaluate the idea of “the small, the agile, and the many.” How to iterate at scale and at speed. How to take things that meet operational needs and make them part of the force structure, deploying them in novel naval formations, learning their operational capabilities, not just their technical merits. If we’re successful, then we can help guarantee the rest of century.

What Can Go Wrong?
During the Cold War the U.S. prided itself on developing offset strategies, technical or operational concepts that leapfrogged the Soviet Union. Today China has done that to us. They’ve surprised us with multiple offset strategies, and more are likely to come. The fact is that China is innovating faster than the Department of Defense, they’ve gotten inside our DoD OODA loop.

But China is not innovating faster than our nation as a whole. Innovation in our commercial ecosystem — in AI, machine learning, autonomy, commercial access to space, cyber, biotech, semiconductors (all technologies the DoD and Navy need) — continues to solve the toughest problems at speed and scale, attracting the best and the brightest with private capital that dwarfs the entire DoD R&E (research and engineering) budget.

RADM Selby’s plan of testing the hedge of “the small, the agile, and the many” using tools and technologies of the 21st century is exactly the right direction for the Navy.

However, in peacetime bold, radical ideas are not welcomed. They disrupt the status quo. They challenge existing reporting structures, and in a world of finite budgets, money has to be taken from existing programs and primes or programs even have to be killed to make the new happen. Even when positioned as a hedge, existing vendors, existing Navy and DoD organizations, existing political power centers, will all see “the small, the agile, and the many” as a threat. It challenges careers, dollars, and mindsets. Many will do their best to impede, kill or co-opt this idea.

We are outmatched in the South China Sea. And the odds are getting longer each year. In a war with China we won’t have years to rebuild our Navy.

A crisis is an opportunity to clear out the old to make way for the new. If senior leadership of the Navy, DoD, executive branch, and Congress truly believe we need to win this fight, that this is a crisis, then ONR and “the small, the agile, and the many” needs a direct report to the Secretary of the Navy and the budget and authority to make this happen.

The Navy and the country need a hedge. Let’s get started now.

Filed under: Gordian Knot Center for National Security Innovation, Navy | 8 Comments »

Technology, Innovation, and Great Power Competition  – Wrap Up

Posted on January 11, 2022 by steve blank

This article first appeared in West Point’s Modern War Institute.

We just had our final session of our Technology, Innovation, and Great Power Competition class. Joe Felter, Raj Shah and I designed the class to give our students insights on how commercial technology (AI, machine learning, autonomy, cyber, quantum, semiconductors, access to space, biotech, hypersonics, and others) will shape how we employ all the elements of national power (our influence and footprint on the world stage).

(Catch up with the class by reading our intro to the class, and summaries of Classes 1, 2, 3, 4, 5 6, 7 and 8.)

This class has four parts that were like most lecture classes in international policy:

  • Weekly Readings – 5-10 articles/week
  • 20+ guest speakers on technology and its impact on national power – prior secretaries of defense and state, current and prior National Security council members, four-star generals who lead service branches
  • Lectures/Class discussion
  • Midterm individual project – a 2,000-word policy memo that describes how a U.S. competitor is using a specific technology to counter U.S. interests and a proposal how the U.S. should respond

The fifth part of the class was unique.

  • A quarter-long, team-based final project. Students developed hypotheses of how commercial technologies can be used in new and creative ways to help the U.S. wield its instruments of national power. And then they got out of the classroom and interviewed 20+ beneficiaries, policy makers, and other key stakeholders testing their hypotheses and proposed solutions.

At the end of the quarter, each of the teams gave a final “Lessons Learned” presentation with a follow-up a 3,000 to 5,000-word team-written paper.

By the end the class all the teams realized that the problem they had selected had morphed into something bigger, deeper and much more interesting.

Team Army Venture Capital

Original problem statement: the U.S. needs to reevaluate and improve its public venture capital relationship with companies with dual-use technologies.

Final problem statement: the DoD needs to reevaluate and improve its funding strategies and partnerships with dual-use mid-stage private companies.

If you can’t see the presentation click here.

We knew that these students could write a great research paper. As we pointed out to them, while you can be the smartest person in the building, it’s unlikely that 1) all the facts are in the building, 2) you’re smarter than the collective intelligence sitting outside the building.

Team Conflicted Capital

Original problem statement: Chinese investment in US startups with critical technologies poses a threat to US military capabilities, but the lack of transparency in venture capital makes it challenging to track them.

Final problem statement: Chinese adversarial venture capital investments in U.S. dual-use startups continue to threaten US military capabilities across critical technologies, but the scope of the problem is relatively small. VCs and entrepreneurs can play a role in addressing the challenge by shunning known sources of adversarial capital.

If you can’t see the presentation click here.

By week 2 of the class students formed teams around a specific technology challenge facing a US government agency and worked throughout the course to develop their own proposals to help the U.S. compete more effectively through new operational concepts, organizations, and/or strategies.

Team Aurora

Original Problem Statement: How can the U.S. employ its cyber capabilities to provide the populace of China with unrestricted Internet access to bolster civil society against CCP crackdowns, in order to pressure the PRC, spread American liberal values, and uphold U.S. freedom of action in the information domain?

Final Problem Statement: How does the USG leverage a soft-power information campaign to support Hong Kong residents’ right to self-determination and democratic governance without placing individuals at undue risk (of prosecution as foreign agents under the National Security Law)?

If you can’t see the presentation click here.

We wanted to give our students hands-on experience on how to deeply understand a problem at the intersection of our country’s diplomacy, information, its military capabilities, economic strength, finance, intelligence, and law enforcement and dual-use technology. First by having them develop hypotheses about the problem; next by getting out of the classroom and talking to relevant stakeholders across government, industry, and academia to validate their assumptions; and finally by taking what they learned to propose and prototype solutions to these problems.

Team ShortCircuit

Original Problem Statement: U.S. semiconductor procurement is heavily dependent on TSMC, which creates a substantial vulnerability in the event a PRC invasion of Taiwan, or other kinetic disruptions in the Indo-Pacific.

Final Problem Statement: How should the U.S. Government augment the domestic semiconductor workforce through education and innovation initiatives to increase its semiconductor sector competitiveness?

If you can’t see the presentation click here. 

We want our students to build the reflexes and skills to deeply understand a problem by gathering first-hand information and validating that the problem they are solving is the real problem, not a symptom of something else. Then, students began rapidly building minimal viable solutions (policy, software, hardware …) as a way to test and validate their understanding of both the problem and what it would take to solve it.

Team Drone

Original Problem Statement: Drones can be used as a surprise element in an amphibious assault to overwhelm defenses. In a potential Taiwan Strait Crisis, there is a need for a low-cost and survivable counter-drone system to defend Taiwan.

Final Problem Statement: Taiwan needs a robust and survivable command and control system to effectively and quickly bring the right asset to the right place at the right time during an invasion.

If you can’t see the presentation click here.

One other goal of the class was testing a teaching team hypothesis – that we could turn a lecture class into one that gave back more in output than we put in. That by tasking the students to 1) use what they learned from the lectures and 2) then test their assumptions outside the classroom, the external input they received would be a force multiplier. It would make the lecture material real, tangible and actionable. And we and they would end up with something quite valuable.

Team Apollo

Original Problem Statement: The Space Force must leverage commercial innovation and establish a trained, experienced acquisition workforce that will deliver innovation impact that the Space Force requires.

Final Problem Statement: The United States Space Force lacks the supply chain and rapid launch capabilities needed to respond to contingencies in space. The private sector possesses these capabilities, but is not being adequately leveraged or incentivized.

If you can’t see the presentation click here. 

We knew we were asking a lot from our students. We were integrating a lecture class with a heavy reading list with the best practices of hypothesis testing from Lean Launchpad/Hacking for Defense/I-Corps. But I’ve yet to bet wrong in pushing students past what they think is reasonable. Most rise way above the occasion.

Given this was the first time we taught integrated lectures and projects our student reviews ranged from the “we must have paid them to write this” to “did they take the same class as everyone else?” (Actually it was, let’s fix the valid issues they raised.)

A few student quotes:

“This is a MUST TAKE [caps theirs]. The professors and teaching team are second to none, and the guest speakers are truly amazing. This course is challenging, but you truly get out of it what you put into it, and you will learn so much crucial and interesting material.”

“THIS IS A FANTASTIC COURSE! [caps theirs]. The material was excellent, the instruction from legendary professions was top notch and the reading material was timely, interesting, and relevant. Anyone who is interested in geopolitics and technology innovation needs to take this course. Not only that, but each week features a different guest speaker that is usually from the highest levels of US government and is THE expert in the subject for that week’s course. Really amazing experience getting to listen to and have Q&A with such incredible people.”

Team Catena

Original Problem Statement: China’s cryptocurrency ban presents the U.S. with an opportunity to influence blockchain development, attract technical talent, and leverage digital asset technology.

Final Problem Statement: CCP’s economic coercion makes countries such as Australia dependent on China’s economy and vulnerable to the party’s will. The U.S. must analyze which key Australian industries are most threatened and determine viable alternative trading partners.

If you can’t see the presentation click here.

A few more student quotes:

“This is hands-down one of the best courses I’ve taken at Stanford. From the moment I walked into the door, I was stunned by both the caliber of people you’re sharing oxygen with in that room, and how welcoming and accessible they are. Despite it being the first offering of this course, everything was well-organized, and our team was always supported with a wealth of resources and access we needed to get our policy deliverables to, alongside a healthy dose of near-constant feedback and encouragement from the teaching team. Readings were engaging and insightful, and the guest list we had was simply unbelievable- Mattis, McFaul, Rice, Pottinger, among several others in the White House, Pentagon, and beyond. There’s a real feeling that everyone who worked on this course wants you to grow as a student but also teach them what you’re learning.

Beware Steve Blank- he can be harsh and aggressive but exemplifies the ‘rude but life-saving doctor’ trope. I’ve learned more from responding to a single Blank cold-question in lecture than from three entire quarters of applied math at Stanford. Be sure to get started early on your teamwork and talk to the lecturers as much as you can- this really is a ‘you get as much as you give’ course, and the highest returns are to be had by being tenacious, loud, and unabashed in your questioning.
And, for God’s sake, don’t draw cartoons on your final presentation- the JCOS might be watching.

“DO NOT TAKE THIS COURSE! This class is a complete waste of time.“

“This was the worst class I took at Stanford “

While the positive feedback accolades for the class were rewarding, several comments identified areas we can improve:

  • Letting the students know upfront the workload and unique format of the class
  • Better organization and timing
    • Readings: be much clearer on which ones are mandatory vs optional
    • Clarify details, flows and objectives for each class
    • Tie speakers to projects / student presentations
  • Make weekly office hours mandatory to ensure all students receive regular professor/student interaction, feedback and guidance from week 1

All of our students put in extraordinary amount of work. Our students, a mix between international policy and engineering, will go off to senior roles in State, Defense, policy and to the companies building new disruptive technologies. They will be the ones to determine what the world-order will look like for the rest of the century and beyond. Will it be a rules-based order where states cooperate to pursue a shared vision for a free and open region and where the sovereignty of all countries large and small is protected under international law? Or will it be an autocratic and dystopian future coerced and imposed by a neo-totalitarian regime?

This class changed the trajectory of many of our students. A number expressed newfound interest in exploring career options in the field of national security. Several will be taking advantage of opportunities provided by the Gordian Knot Center for National Security Innovation to further pursue their contribution to national security.

Lessons Learned

  • We could turn a lecture class into one that gave back more in output than we put in.
  • Tasking the students to test their assumptions outside the classroom, the external input they received was a force multiplier
    • It made the lecture material real, tangible and actionable
  • Pushing students past what they think is reasonable results in extraordinary output. Most rise way above the occasion
  • The output of the class convinced us that the work of students like these could materially add to the safety and security of the free world
  • It is a national security imperative to create greater opportunities for our best and brightest to engage and address challenges at the nexus of technology, innovation and national security

Note: Inspired by our experience with this course, we decided to increase the focus of Stanford’s Gordian Knot Center for National Security Innovation on developing and empowering the extraordinary and largely untapped potential of students across the university and beyond.

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