Biden, Semiconductors, And America’s Future Last Thursday some of America’s top high-tech executives just sent a letter to President Joe Biden , urging him to devote “substantial funding” to our domestic chip manufacturing as part of his Build Back Better plan for economic recovery and revitalizing the nation’s infrastructure. Executives from companies like Intel , and several other major firms joined together to call on Biden to invest in the future of semiconductors. Their urging is not only timely, but underlines the fact that the health of our semiconductor industry must be a national as well as economic security priority. Why? Microchips aren’t just what powers everything we use, from computers and cell phones to satellites and sensors. They aren’t only critical to emerging technologies like artificial intelligence (AI), 5G, and quantum computing. They are also vital components for every modern weapon system in our nation’s arsenal. In a Defense News article , “DoD Adopts 'Zero Trust' Approach to Buying Microelectronics,” the Pentagon’s Director of Research and Engineering for Modernization stated that microelectronics are part and parcel of nearly everything the Pentagon needs and buys, including complex weapons at yahoo systems like the F-35 joint strike fighter and our sophisticated ballistic missile defense systems. The Pentagon knows making sure that those components carry a Made in U.S.A. sticker means their fabrication contains no malign surprises. Thirty years ago, more than one third of all microchips made around the world came out of the American companies that gave Silicon Valley its name (silicon being the key ingredient in manufacturing microchips containing millions of microscopic transistors). Today that number has slipped to only 12 percent—while China is projected to dominate global semiconductor production by 2030. The Department of Defense has every reason to worry about what happens if those numbers don’t turn around. China has every reason to worry if they do. Tech firms like Huawei and ZTE are major customers of the US output. China — the world’s biggest semiconductor market, accounting for more than 50% of all chips sold —took a major hit last year when the Trump administration shut off Huawei’s access to American chips, forcing the tech company all but had to close its doors. That’s why China’s five-year plan for the chip industry gets the same strategic attention Beijing once gave to building its atomic bomb. If Chinese companies lose the semiconductor race to the U.S., they will be permanently at a disadvantage to U.S. tech, from AI and 5G to the real frontier of the post-digital age, quantum. Keeping the US in the lead makes strategic, as well as economic, sense. The Boston Consulting Group and the Semiconductor Industry Association issued a report in September 2020 on the perilous state of America’s semiconductor future. It takes as much as $20 billion to build a big chip plant, considerably more than a new aircraft carrier or nuclear power plant, the BCG report estimated. Most of the fabs in other countries are supported by big government budgets, including in China. The federal government needs to deploy $20 billion to $50 billion to make the U.S. as attractive a location for plants as Taiwan, China, South Korea, and parts of Europe, have become.https://www.forbes.com/sites/arthurherman/2021/02/17/biden-semiconductors-and-americas-future/
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