Rise of global chip industry and low-wage transistor girls

Female workers in Asia played an extraordinary role in the chip-making revolution from the beginning of the modern semiconductor industry. Although mainly men were working on the design of transistors, a group of skilled hands was needed to transform the designed chips into real products that would be fast, accurate, and low-budget. Women filled this gap, especially women workers on assembly lines.

New York engineer Charlie Spork was the main driver of this enormous change. While working for General Electric on the East Coast in the 1950s, he was not getting along with the trade unions. The situation was so adverse that the trade union workers burned his effigy. With that bitter experience, in 1959 he joined the fledgling West Coast company Fairchild Semiconductor, where a new horizon in modern chip manufacturing was opening up.

At that time, trade unions on the West Coast were relatively weak, and Spork wanted to keep things that way. He began rewarding productive workers with ‘stock options’, a revolutionary idea at that time. But in return, he demanded full commitment from his workers during performance.

While East Coast electronics companies employed predominantly male workers, Fairchild and other new chip companies in Silicon Valley hired women on assembly lines. This decision was not made with any consideration of gender equality or inclusion. Rather, women could be paid less, and management believed that the small hands of women workers were ideal for the extremely delicate tasks of mounting silicon chips, soldering gold wires, and testing circuits.

Using women to work was not entirely new on the West Coast. Women in the Santa Clara Valley had already worked in agriculture and factories during the war. But the chip industry gave that labour a new technological edge. In 1965, changes in U.S. immigration laws brought more women, especially foreign women, into the industry.

Still, labour costs in the United States were high. So Spork and others looked outside California for cheap labour. Fairchild opened factories in Maine and on the Navajo Reservation in New Mexico—but that didn’t make much difference. One day, Fairchild co-founder Bob Noyce sent Spork to inspect a factory in Hong Kong. The workers there, mostly women, earned just 25 cents an hour, a tenth of what they did in the United States.

The workers there were also faster, more patient, and more content with lower wages.

Despite being so close to China, Spork was deeply attracted by the idea. He rented an old sandal factory near Hong Kong Airport for Fairchild. A large Fairchild logo began to light up the port area. Although the silicon wafers were made in California, America, the final assembly began in Hong Kong. In 1963 alone, 120 million semiconductor components were assembled in Fairchild's Hong Kong factory. Their quality was also excellent. Fairchild could hire trained engineers there, which was not possible in America.

Fairchild was the first American chip company to move assembly work to Asia. Soon after, Texas Instruments and Motorola, among others, followed suit. Within a decade, almost all American semiconductor companies had set up assembly plants abroad, especially in Asia.

By the mid-1960s, wages in other Asian countries were lower than in Hong Kong: 19 cents an hour in Taiwan, 15 cents in Malaysia, 11 cents in Singapore, and 10 cents in South Korea. Spork then went to Singapore, where the then-Prime Minister, Lee Kuan Yew, had kept the labour unions under control and the situation was more favourable for Fairchild. Fairchild soon set up a factory in Penang of Malaysia.

The term “globalization” was not yet a popular one. However, in a drive to reduce costs and increase productivity, the semiconductor industry was creating an Asia-centric supply chain and that was the base of today’s “globalized” electronics manufacturing industry.

Charlie Spork had no intention of changing the global trading system, he just wanted to make chips cheaper. And Asia’s large, well-regulated, and cheap labour market, especially women’s effort, was the perfect fit for him.

(Adapted and abridged from Chapter 9 ('The Transistor Salesman') of Chris Miller's acclaimed book 'Chip War')