U.S. Makes Policy Changes in Semiconductor Manufacturing

By: Madeline Butler ’24

     The United States’ domestic semiconductor manufacturing industry has garnered an influx of interest amid recent concerns about international chip manufacturing. While these pieces of technology are only about 14 to 10 nanometers in size; they are vital to the functions of modern life.

     “Semiconductors are an essential component of electronic devices, enabling advances in communications, computing, healthcare, military systems, transportation, clean energy and countless other applications,” according to the Semiconductor Industry Association.

     Because semiconductors are such an important part of a large variety of functions, the United States government is interested in safeguarding this vital resource. On August 9, 2022, President Joe Biden signed The CHIPS and Science Act in law, providing roughly $280 billion in new funding to boost domestic manufacturing and research of semiconductors in the United States.

     According to the White House, this funding will “strengthen American manufacturing, supply chains, and national security, and invest in research and development, science and technology, and the workforce of the future to keep the United States the leader in the industries of tomorrow, including nanotechnology, clean energy, quantum computing, and artificial intelligence.  The CHIPS and Science Act makes the smart investments so that Americans can compete in and win the future.”

     Even though the CHIPS Act was signed over a year ago, the United States is still working to implement the funding. The legislation included $52 billion which is going to strengthen chip manufacturing. Of this, $39 billion is going to manufacturing incentives and $13.2 billion for research and development and workforce training. $500 million is going to international information technology security and semiconductor supply chain activities.

     While funding is one piece of the industry, staffing is another. Currently much of the semiconductor industry supply chain is based overseas, which means that facilities in the United States struggle to find qualified workers.

     “The chip industry in the U.S. is projected to grow by nearly 115,000 jobs by 2030, according to a new study from Oxford Economics and the Semiconductor Industry Association. The study finds 67,000 of those jobs for technicians, computer scientists and engineers risk going unfilled by 2030 due to a lack of educational training programs and school funding,” according to CNBC.

     Labor is also incredibly expensive, so companies often look to other places to cut down on this cost. The majority of chip manufacturing occurs in Asia because it is far cheaper to produce integrated circuits and chips on a large scale in that part of the world. Morris Chang, the founder of TSMC, said that is costs 50% more to manufacture chips in the United States than Taiwan.

     Another large part of the significant cost is the cost of the foundries, also called fabs, where the chips are manufactured.

     “A modern fab is something like half a million square feet,” said Bob Johnson, an analyst at Gartner, and requires “monstrous clean rooms that have massive air handling capabilities.” He added that these massive buildings require “exceptionally strong foundations and you cannot have any vibration in the fab because it can wreck themanufacturing process.”

     Chip manufacturing also requires a wide range of specialized inputs, including pure chemicals such as fluorinated polyimide, etching gas and chip etching machines. In places like Taiwan, the providers of these products are located close to semiconductor factories, but this close proximity between parts of the supply chain has not yet been established in the United States.

     While many improvements are still needed when it comes to supply chain and labor efficiency, the United States is working to boost their domestic semiconductor manufacturing industry. Perhaps one day, many of the tiny chips that power so much of modern life will say “Made in the U.S.A.”

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