A New York Times report published late this afternoon notes that Pentagon officials have been holding private discussions with tech industry executives to wrestle with a key question: how to ensure future supplies of the advanced computer chips needed to retain America’s military edge.
The talks, some of which predate the Trump administration, recently took on an increased urgency, according to people who were involved or briefed on the discussions. Pentagon officials encouraged chip executives to consider new production lines for semiconductors in the United States, said the people, who declined to be identified because the talks were confidential.
The discussions are being driven by the Pentagon’s increased dependence on chips made abroad, especially in Taiwan, as well as recent tensions with China, these people said.
https://www.nytimes.com/2019/10/25/technology/pentagon-taiwan-tsmc-chipmaker.html
The Chinese government has made semiconductors a key pillar of its so-called Made In China 2025 plan, an initiative to boost the production of higher value products. China aims to produce 70% of the semiconductors it uses by 2025, and that drive is backed by billions of dollars of investment by the government.
On top of that, the U.S. has recently threatened key Chinese technology firms like Huawei with being cut off from American products, so that’s sharpened Beijing’s focus on cultivating its domestic chip industry, analysts have told CNBC.
Analyst firm China Renaissance estimates that SMIC is about 17 quarters behind TSMC when it comes to 14nm and 16nm chips.
If Chinese foundries are not able to manufacture the latest chip sizes, that means companies like Huawei, which design their own chips, have to go to rivals. For example, Huawei’s “Kirin” series of processors for its smartphones have a 7nm design and are manufactured by TSCM.
Currently, only 16% of the semiconductors used in China are produced in the country, and only half of those are made by Chinese firms, according to a report by the Center for Strategic and International Studies. There are signs, however, that the ratio could change.
China’s semiconductor production capacity is growing at the fastest in the world, according to industry body SEMI.
Still, experts have told CNBC that China won’t close the gap with other countries for at least a decade.
https://www.cnbc.com/2019/08/06/smic-chinas-biggest-chipmaker-is-still-years-behind-its-rivals.html
If something would happen to Taiwan we have a problem.
Semiconductor Engineer:
The problem of US dependence on foreign manufactures turned first up on displays on which I worked in the US
Flat panel displays were invented in the US.
What I learned working on military displays
The “kill ratio” of fighter plane pilots depends critically on the quality of the displays that feed information to the pilot. As the fighter turns the display alternatively goes from deep shadow to bright sunlight - and instantaneously has to adjust its brightness to feed the pilot crucial information.
You may be annoyed that you can not read the screen of an Iphone in very bright sunlight. At 20 000 ft, not able to see your fighter display might kill you.
For about a decade the Pentagon kept two display manufacturers in the US alive. It then gave up.
There is no US manufactures of displays left.
Eric R Fossum:
I have co-founded and led several “fabless” semiconductor startups, including the one that enabled a camera in every pocket. TSMC is a great company, but I wish TSMC had a state of the art trusted fab in the US. Perhaps Apple and other cash-rich high tech giants can partner with TSMC and the US government to make this happen. Increased support for training US students in micro and nano electronics is also needed. As the fabs left the US,so shrunk university activity in this area in our country as well as ready access to state of the art technology. There are also other elements of the ecosystem that need strengthening. We can rebuild it if we have the will. Investment really isn't that expensive in the big picture and will probably pay for itself many times over. How much has been invested (using that term loosely) in US farmers in the past 18 months?
Walkman
I and many others in engineering saw this situation coming 25 years ago and tried to warn about it, but our political ‘leaders’ refused to listen, due to some combination of ignorance about technology and manufacturing, and greed for donations from investors looking for a quick profit from offshoring.
The US government must require that all electronic circuitry, including integrated circuits (‘chips’) used in any security related application, especially in defense and vital infrastructure, be manufactured in secure facilities in the US, and should finance as necessary the construction of the required production facilities and their necessary supply chains. The US defense budget is over $700 billion annually, a small fraction of which, say 5%, spent as direct investment or set aside as underwriting, would be money well spent to ensure that our military hardware won’t be rendered useless by a lack of secure electronics. Also, the requirement for US manufacture would ensure a market for US plants large enough to support a self- sustaining supply chain.
The US government must act quickly to fix this problem or it could become unsolvable sooner than anyone expects. The risk of inaction is catastrophic.