President Biden is traveling around the country to meet with state leaders in an effort to ramp up semiconductor production across the United States.
“America is back. We are determined to lead the world in semiconductor manufacturing,” President Biden said Tuesday.
In 1990, the United States It produces about 37% of the chips Used all over the world. This percentage has decreased over time to just 12%. It is becoming more and more expensive to set up and operate a manufacturing facility, or “fab,” in the United States. Costs are 25% to 50% higher than abroad.
“We kind of had this eye-catching situation that if we had MIT graduates here, we won Nobel Prizes here, we designed here. Manufacturing didn’t matter,” said Rep. Ro Khanna, MD, California. “Both sides have just watched one industry after another go offshore. Whether it’s steel, whether it’s aluminum and, unfortunately, all semiconductor production.”
nearly three years ago, Exposure to the coronavirus pandemic The first signs of US weakness when it comes to semiconductor manufacturing.
“The truth is, we’ve had a whole world climbing into work-at-home and home-school electronics, and those electronics are full of chips. So, it’s not surprising that demand for chips just got off the charts,” Semiconductor Industry Association President John Neufer said.
Senator John Cornyn, R-Texas, Shortages of masks and gloves, he said, exposed other weaknesses in American manufacturing, since many items needed during the pandemic were made in China. He has been working alongside fellow Democrats including Virginia Sen. Mark Warner and W.C Arizona Sen. Mark Kelly to consider other products made almost exclusively abroad.
“The advanced semiconductors that power everything from your cell phone to the F-35 to Javelin and Stinger missiles, almost all of it is made in Asia and is not here in America anymore,” Cornyn said.
Neuffer said most of the US fab was operating at full capacity but could not keep up with the demand.
Biden signed The CHIPS and Science Act became law last year after a bipartisan push from lawmakers. It incentivized corporations to build and manufacture on American soil.
“We finally caught up. That’s the short term. Chips law It’s really in the long run, Neuffer said. “There was an overemphasis in certain aspects of our supply chain and what we’re trying to do now is diversify. Right now, 75% of manufacturing happened in Asia. That was in East Asia. That’s probably too much.”
Commerce Secretary Gina Raimondo spoke about CHIPS for America in a “Special Report” this past February. Semiconductor companies have been able to apply for these incentives through the initiative.
“Congress has sent $52 billion to us here at the Department of Commerce, and our job is to monetize that, and work with companies to make chips in America,” Raimondo said. “Every governor thinks the next chip manufacturer is going to be in their state. They’re going to compete. I’m sure they’re going to put incentives on the table and that’s what they should do.”
Several companies are starting to break ground on new facilities and expansions before formally signing on to the CHIPS Act, including New York-based GlobalFoundries.
“We need the right economics to continue adding capacity in the US,” said GlobalFoundries CEO Thomas Caulfield. “We have a facility that needs to grow at scale in upstate New York in what we call the Fab 8. Chips are going to be an integral part of the economy to close the funding gap, to create that capability that can compete globally against all players in manufacturing.”
Since the end of 2022, at least 23 new chip molds have been announced and nine of them will ramp up production, according to the Semiconductor Industry Association. Companies including Intel and TSMC have announced plans to build a new Vapense in Arizona.
“Nationally, we have suppliers across the country who will provide the tools and materials to build the best semiconductor chips in the world,” Kelly said. “These are also jobs where you don’t need a four-year degree to get and you can actually get a salary you can start a family on.”
Private investment exceeding $210 billion is expected to help create around 44,000 jobs in the industry. Over $60 billion is invested in manufacturing in Texas. Companies including Samsung and Texas Instruments plan to build new facilities in that state.
“It takes time for change, to open up diversified sources, so it’s probably 2024 until you see manufacturing,” Cornyn said. “But Texas Instruments is expanding its existing footprint. Samsung is in Texas, Intel is in Ohio, Micron is in New York, so all of this takes some time, but we don’t have a minute to waste.”
US domestic production It is expected to increase in the near future, but it may take some time to compete with Taiwan overseas.
“I would say it’s going to take years,” Kelly said. “The CHIPS funding gives us the tools we need to start making semiconductor chips here.” “What it means for our country: That we don’t have to cross the Pacific to have something so critical everything has an on/off switch.”
Caulfield noted that it took about three decades to create an imbalance in semiconductor production around the world.
“This did not happen overnight for our industry,” Caulfield said. “It will take decades to correct this problem. So this is a good start and the sooner we can move this forward as an industry, the better.”
Shortages have also eased, but technology is improving, and demand for chips is expected to grow.
“If you ever He sat in an electric car Or you have a large display board, and it all requires a lot of chips,” Neuffer said. Where we have 5G now, we’ll move to 6G. These are all products that require a lot of chips. The combination of current and emerging markets for chip technology indicates that the demand for semiconductors will be very high over the coming years and decades.”
Lawmakers and experts agreed that it’s not just semiconductor manufacturing that needs to be ramped up.
“Our products, our cars, our dishwashers, our dryers and our refrigerators are still not produced in the United States,” Khanna said. “I don’t want a situation where advanced chips are made in America, but everything consumers buy is made in chinaSo we need to do more.”
Caulfield agreed and said that American manufacturing of products that require chips is required to keep pace with semiconductor production in the United States.
“Probably the biggest problem that we still need to face is making sure that the demand for all this capacity that we want in the United States is met,” Caulfield said. “The last thing we want to do is in the industry, create capacity in the US and make it underutilized.”