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15Dec

The time is right to regain our domestic semiconductor edge!

In June’s blog, I wrote about my support for the then-$3 trillion infrastructure initiative being promoted by President Biden and promised to share a couple of thoughts on the portion of that proposal aimed at strengthening our nation’s semiconductor sector (then valued at $50 billion).

While few but the most ardent fans of political gamesmanship enjoyed watching the bill-making process in D.C. over the intervening months, the final Bipartisan Infrastructure Law (formally the Infrastructure Investment and Jobs Act) was signed by President Biden on November 15. Now valued at a total of $1.2 trillion in infrastructure investment, this version unfortunately doesn’t appear to specifically call out semiconductor investments like the original version did – though it’s monster-sized investment in next-gen public transportation, smart energy grids, electric vehicles, water systems, broadband, and other segments of the economy will most definitely require plenty of computing power and indirectly spur growth of the semiconductor and the related technologies sector.

That being said, the $200 billion United States Innovation & Competition Act (USICA) bill passed by the Senate (June 8, 2021) did specially call for $52 billion to expand our semiconductor capacity – and remains viable, even if it has been sidelined by the larger infrastructure push and, right behind it, President Biden’s Build Back Better plan. (You can see a nice summary of USICA’s pros and cons here.)

Fingers crossed on that, as the saying goes!

Why all this fuss about the importance of bringing offshore semiconductor infrastructure and capacity back to the U.S.?

First and foremost – and as the pandemic made abundantly clear — there are the supply-chain problems that arise from not having our own robust semiconductor industry here in the U.S. On this, CEO of Intel, Pat Gelsinger, offered an excellent summary in his late-April op-ed in the Financial Times (shared via a post on LinkedIn). You can also see Pat discuss them at length with Senator Mark Kelly of Arizona and Fast Company’s Stephanie Mehta, last week at the Aspen Ideas Festival. Or check out his most recent comments (C/Net) on his plan to keep Intel competitive in this regard.

As important, if not more so, is the fact that not fully participating in the global semiconductor race from a firm position right here in the U.S. will be tantamount to ceding leadership in a whole range of absolutely vital sectors.

More to the point, I fervently believe that semiconductor leadership is actually critical to the future of this country and our remaining a world superpower. Consider that future AI computing platforms will all run on advanced silicon – and that future AI algorithms and compute solutions will, in turn, drive future breakthroughs in medicine (e.g. mRNA based treatments/Vaccines), mobile communication, cloud-computing, all of our best chances at stemming the literal rising tides of climate change (e.g. autonomous cars, smart cities, advanced clean energy systems), and much more. If the U.S. is not leading these industries, we’ll surely fall from our hard-earned perch at the top of the world’s technology flowchart.

Beyond the loss of economic prowess and competitiveness associated with all of that, next consider how honing and keeping our semiconductor edge is also a matter with serious national security ramifications. That’s because our government, security and cyber-security infrastructure, and military strength are all-but-entirely technology- (and therefore chip-) based, as are the defensive and offensive tools we rely on to protect our borders and promote democracy worldwide, e.g. avionic/drones, guided weapons, missile defense systems, mobile combat equipment, and much more. Put more bluntly: Given rising geopolitical tensions and stakes, imagine the preponderance of our national security infrastructure, advanced weaponry, radar systems, and all manner of military vehicles being based indefinitely on semiconductor content sourced outside from a land afar. Would that secure our position as a superpower?

And, finally, speaking of democracy, remember the adage that ‘nature abhors a vacuum.’ In geopolitical terms, that means that if America does not lead the way in semiconductor innovation — and at least build and maintain a respectable amount of capacity for chip manufacturing on this continent – some other power most certainly will.

What can participants in the tech industry do to help?

As I mentioned in my previous blog, there are a few things each of us can do besides sit passively on the sidelines, hoping policy makers in our nation’s capital ‘get this right.’

  • First, whether you are an OEM, PCBA/Circuit Board assembly provider like Cascade Systems Technology, or a raw-materials provider – you can consciously buy more content here in U.S., by gradually ratcheting down over-reliance on suppliers from afar.
  • Relatedly, the electronics industry can and should take note of, take pride in, and proactively support the many semiconductor-savvy, innovative and advanced-PCBA design and production resources already here in the U.S. (I count Cascade Systems Technology among these proven American “landing zones” for silicon, as we are an experienced team that is willing, eager, and committed to helping OEMs extract every bit of functionality and magic from their silicon.) In other words, even if you currently rely on chips from abroad, you can still source the rest of your “solution stack” right here in the U.S.
  • Next, and as I mentioned in my previous blog on the infrastructure bill, we can all take an active role in supporting the legislation now in the works – specifically the USICA I mention above: Write or call your representative to tell them you back President Biden’s and Congress’s efforts to bring chip-making home with the help of public dollar. To that end, here’s a link to the House of Representative site to ID/reach out to your Representative; and here is the equivalent for the U.S. Senate.
  • Lastly, if you are able, make investments in the U.S.-based semiconductor and technology sector, whether that means bringing more of your circuit board or box assemblies to your local CM; supporting technology education in schools and colleges; encouraging the youth of this country to seek careers in technology; forming strategic alliances with U.S. or at least free-world chip suppliers; or employing other here-at-home investment strategies.

Think all this is just so much hyperbole?

Tell that to the nations who could not compete in the great age of sail power for lack of old-growth trees for shipbuilding. Or to countries who effectively missed the original industrial revolution due to a dearth of affordable and easily accessible steel, oil, coal, and water. Or to nations who are struggling, to this day, with raising their citizens’ standard of living for lack of reliable power grids and education systems – the ‘raw materials’ of the early stages of the information age…

In the same way, semiconductors and related technologies today represent the foundation of our future prosperity — but we must play this right, and yes, we can!

–  Shantanu R. Gupta,
CEO, Cascade Systems Technology

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